COVID-19: Employment Team's Update - Boodle Hatfield

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20 Mar 2020

COVID-19: Employment Team’s Update

Boodle Hatfield's Employment Team has been working with clients to assess some of the severe challenges thrown up by the COVID-19 pandemic.

Some of the responses are:

  • Salary reductions: some drastic measures are already emerging. We are aware of businesses in the leisure, travel and gaming sectors reducing salaries to 20% to 50% of usual pay and introducing rota systems under which staff work three weeks at full pay and one week unpaid. The rationale being that drastic action is required now to hopefully prevent mass redundancies later. We are aware that others are actively requesting that the UK government introduces further emergency measures similar to those recently introduced by the Spanish government. Those with unionised workforces are urgently discussing with trade unions a range of measures to prevent redundancies such as lay-offs and short-time working (although technically these measures can only be imposed without risk if the employer has a contractual right to do so) as well as temporary salary reductions.
  • Unpaid sabbaticals: we are aware of businesses in e.g. the travel sector placing staff on unpaid sabbaticals.
  • Reduced working days: we are aware of businesses in the retail and hospitality sectors considering moving imminently to reduced working weeks, in some cases to two or three days.
  • We understand that a number of retail firms are preparing to make redundancies. Mandatory redundancy consultation rules apply if 20 or more redundancies are proposed (and the mandatory consultation period is longer if 100 or more redundancies are proposed). Even changing terms and conditions (even if temporarily) trigger these rules. Employers are unlikely to have the time to undertake full/proper consultation; however, even a little will help reduce the value of protective award claims which are up to 90 days gross pay per impacted employee. There is a “special circumstances” defence which employers can run if they are unable to comply with the mandatory consultation rules. The defence applies in very narrow circumstances but we are actively considering whether or not such a defence can be applied in the current circumstances.
  • Some firms are looking to bring consultants/contractors and employees on fixed-term contracts to an end immediately.
  • We gather that some firms are asking employees to take accrued holiday by the end of May so that staff do not have significant holiday accrual to take when matters return to normal and firms need to rapidly increase productivity.
  • Employers should check to make sure they have death in service benefits in place and that premiums are fully paid up.
  • For those who have new hires starting imminently, consideration should be given to delaying start dates.