Tag: Coronavirus COVID-19 Blog

  • EMPLOYMENT ENGLISH LAW UPDATE – CORONA VIRUS

    Introduction

    The government has recently announced financial support for employers/employees and selfemployed individuals whose businesses are unable to operate during the coronavirus lockdown subject to certain conditions. This update sets out the main details of each scheme.

    Employers/Employees

    Corona Job Retention Scheme (CJRS) – furlough leave
    The CJRS provides support to employers whose employees are unable to work because the business is unable to operate due to the coronavirus lockdown. For example, restaurants, retail and leisure which were closed by government order.

    The CJRS enables employers to be reimbursed for 80% of employees’ wages subject to a
    maximum cap of £2,500 per month (plus employers’ national insurance and minimum auto enrolment pension contribution) provided employees were employed before 19 March 2020 (previously 1 March but changed on 15 April 2020).

    Employers can choose to pay the additional 20% of wages (which will not be reimbursed) but there is no obligation to do so

    How do Employers apply?

    To qualify, employers have to put employees on ‘furlough leave’, i.e leave of absence due to
    the (temporary) shutdown of the business. Employees cannot do any work for their employer while they are on furlough leave, so employees on reduced or shortened hours would not qualify.

    Employees have to agree to furlough leave but, as the alternative could be redundancy,
    employees will most likely agree. Under the CJRS, the furlough leave agreement must be in writing and also as the 20% wages reduction and absence leave is a variation to the employee’s contract. The minimum period of furlough leave is 3 weeks and it is possible to rotate staff if some work is available.

    Once the employees are on furlough leave then the employer pays their 80% wages in the
    normal payroll with the tax and NI deductions (on 80%) and then applies for reimbursement from the government through an online portal system due to be available by the end of April.

    The government has suggested that if employers cannot afford to pay the employees, they will be able to do so through the Government Loan Scheme.

    The online portal is administered by HMRC using existing PAYE records. Claims can be
    backdated to 1 March provided employees were unable to work during this period.
    © Grower Freeman 2020

    Does it apply to all employees?

    Yes, all employees are covered including full-time, part-time and zero hours workers provided they are on PAYE. Agency staff on PAYE can be furloughed by their agency. Employees who were made redundant in February 2020 and now before 19 March due to the corona virus can be reinstated and claims backdated to 1 March.

    From the latest HMRC guidance, employees on sick leave can be furloughed and vice versa. However, this should not be abused by using furlough pay to top up small amounts of SSP for short term absences

    Employees on maternity leave do not qualify but are still entitled to Statutory Maternity Pay.

    What happens at the end of the three-month scheme?

    Depending on the state of the business, employers can either retain the employees, putting them back on full wages or make them redundant. It is also possible to make employees redundant while on furlough leave. However, the furlough scheme is intended to avoid redundancies during the lockdown period and hopefully save jobs.

    Can employees do any other work whilst on Furlough Leave?

    Employees cannot do any paid work either for their employer or any other employer unless
    there is an existing agreement. They can do voluntary work (unpaid) and, if the employe
    requires them to do training during furlough leave, then they are entitled to be paid the
    national minimum/ living wage.

    Statutory Sick Pay For anyone suffering from Covid-19 or who are self-isolating or shielding others, SSP will be paid on the first day of absence rather than the fourth day. Small to medium sized employers will also be reimbursed for the full amount of SSP rather than having to pay it themselves.

    SSP is minimal – £95.85 per week from 6th April. There is, however, now the option to furlough staff instead, if appropriate

    SSP only applies to employees but self-employed people can also make a claim for universal credit or contributory employment and support allowance.

    Holiday Leave

    The Working Time Regulations have been amended to allow employees/ workers to carry over four weeks of holiday leave to the next two leave years if it was not reasonably practicable to use holiday leave due to the coronavirus pandemic.

    Self-employed

    The government rescue package for the self-employed (individuals and members of a
    partnership) comprises the following:

    • A new self-employed income support scheme will pay self-employed people a taxable grant worth 80% of average monthly income, capped at £2,500 per month © Grower Freeman 2020
    • Income will be calculated by taking the average of income over the last three years from HMRC records.
    • Self-employed people can claim these grants and continue to work in their business (so it is not the same as furlough leave where employees are unable to work for their employer).
    • The scheme is only open to those with trading profits of up to £50k and who make the majority of their income from self-employment.
    • It only applies to those who have submitted a Tax Return for 2019 (this is to minimise fraud).
    • However, those who have only just set up a business or who did not submit their Tax Return by 31.01.2020 can still submit a Tax Return for 2019 for a further four weeks from 26th March 2020.

    How do Self-Employed people apply for this?

    The scheme will not be up and running until the end of June. Unlike the CJRS no application is required. Instead, HMRC will contact eligible self-employed people directly inviting them to fill out an online form and, if approved, will then pay the grant direct into their bank account. Similar to the CJRS, the scheme will only be open for three months from 1st March to end of June but, as it will not be in operation until the end of June, it is not going to provide immediate support

    Other help for the self-employed

    Tax payments due on 31st July 2020 can be put back to 31st January 2021 and VAT Returns can be deferred to 31st March 2021.

    Comment

    The government’s financial support packages during the coronavirus lockdown and the speed with which they have been introduced is unprecedented but these are unprecedented times. It remains to be seen how the schemes will work in practice. Various legal issues have already been addressed in the government’s latest guidance updates and doubtless, more will follow

    Website links:

    https://www.gov.uk/guidance/claim-a-grant-through-the-coronavirus-covid-19-self-employment-income-support-scheme

    Contact details:

    This update was produced by Tessa Fry, Head of Employment at Grower Freeman. For further information or advice, please contact Tessa Fry at tessa@growerfreeman.co.uk -or- 020 7563 5477.

    Disclaimer – This update is intended to provide readers with information on recent legal developments. It should not be construed as legal advice or guidance on a particular matter.

    Publisher/Author Info:

    Grower Freeman
    Ivor House
    25-26 Ivor Place
    London NW1 6HR
    T: +44 (0)20 7723 30
    E: tessa@growerfreeman.co.uk
    W: www.growerfreeman.co.uk

    To View Original Published PDF by Tessa Fry of Grower Freeman, Click HERE

  • Letter from the CEO of Korn Ferry: Gary Burnison

      Hello,

    No one thinks much about this leadership quality—until the you-know-what hits the fan.

    It’s crisis management.

    Thankfully, crises are rare occurrences—the black swans of leadership.

    We’ve done nearly 70 million assessments of executives, so we know what makes a great leader—the best-in-class who are among the top 20 percent. Our research shows that three of the four qualities of a great CEO are largely intuitive: (1) sets vision and strategy; (2) drives growth; and (3) displays financial acumen. The fourth, which no one mentions, is managing crises. It’s underappreciated, overlooked, and often not even one of the top requirements—until a crisis hits.

    This is one of those times.
    A month ago, when the stock market was making all-time highs, only the rare few could have predicted universities would close, companies would tell employees to work from home en masse, and the NBA season would abruptly be suspended, followed by museums, cathedrals, and Broadway darkening.

    While it’s natural in uncertain times for people to turn to the leader for definitive answers, sometimes the authentic answer is “I don’t know right now”—quickly followed by, “And here’s what we are going to do.” In a crisis such as today, leaders need a Plan B—and a Plan C and Plan D as well.

    Leaders always deal with ambiguity—it’s timeless and comes with the job. During crises, ambiguity becomes exponential. As fear becomes contagious across organizations, leaders must manage their own responses to ambiguity.

    How do they do that? By following our six steps of leadership:

    Anticipate – predicting what lies ahead
    Navigate – course correcting in real time
    Communicate – continually
    Listen – to what you don’t want to hear
    Learn – learning from experience to apply in the future
    Lead – improve yourself to elevate others Let me provide some color commentary on what leaders can do to put crisis management in action.

    Start at the Bottom of Maslow’s Hierarchy:
    In a crisis, you first need to meet people where they are. Their most basic needs must be met first and they need to feel safe. Naturally, no one is interested in talking about the company’s strategic plan when they are out buying hand sanitizer and toilet paper. Once their essential needs are addressed, then the focus can shift to alignment, common purpose, elevating others and even opportunities for growth.

    Earthquakes and Aftershocks:
    In Los Angeles, where our firm is based, we’re accustomed to earthquakes—knowing that, when one occurs, the aftershocks are coming. In the same way, in a crisis, you have to anticipate the aftershocks—the unintended consequences of the initial shock to the system. Too often, people don’t consider all the possibilities. Anticipation becomes a Monte Carlo simulation in action. For example, what if travel bans expand, commerce slows, or a liquidity crisis develops, etc.? What is the impact on all aspects of my business? What are the implications for all stakeholders—employees, customers, and investors? Strategy is making a bet, and the skill of anticipating improves one’s odds.

    Urgent vs. Important:
    Day to day, leaders face a multitude of issues—both urgent and important. In the normal course of business, I’ve found that many leaders have difficulty distinguishing between the two. When a crisis hits, though, everything blurs as events and their implications constantly change. What’s important often becomes urgent, and the urgent becomes critical. Leaders must delegate the urgent by empowering others to lead around a common purpose.

    Leave No One Behind:
    In a crisis, leaders must connect with, motivate, and inspire others—and show genuine compassion. In the military, for example, leaders put the safety and well-being of others before themselves. I’ve met a number of military leaders who led during periods of conflict, and many have voluntarily told me, “I’ve never lost a soldier.” This reveals a deep mindset of humility and accountability, rather than hubris and bravado.

    Know What to Do When You Don’t Know What to Do:
    There’s nothing like a crisis or a complex problem to accelerate learning. This is learning agility to the “Nth” degree—applying past lessons to new and unfamiliar situations. It really is knowing what to do when you don’t know what to do. In a crisis, this has never been more profound. Amid uncertainty, leaders need to be hyper-focused on past experiences and synthesize and apply them to real-time, fluid conditions. Clarity comes from finding a close comparison. Is it like the Great Recession? The 1987 stock market crash? The outbreaks of SARS or MERS? By running the “unknown” of the current crisis against the “known” of previous ones, leaders gain perspective, identify patterns, connect the dots, and determine appropriate and timely responses. The eventual recovery may be a V or a U or some other alphabet letter, but there will be a new normal—thanks, ultimately, to the scientists, innovators, and dreamers. The natural inclination in a crisis may be to go into command-and-control. That’s not leadership! It’s creating a “bottom-up” culture of world-class observers to accurately perceive today in order to predict tomorrow.

    Regards,  
    Gary Burnison
    Korn Ferry CEO