Coronavirus – Containment and Commerciality
Updated: Mar 15
UPDATED 13 March 2020 to reflect moving positions with the pandemic.
All the news headlines are about Coronavirus today and this is unlikely to change in the near future. Much of the coverage focuses on how to stay healthy, what to do if you think you might have been exposed to it and how the government is putting in place their plans for dealing with any widespread outbreak.
But what about small businesses? With any contagious disease such as flu or norovirus, the workplace is at risk and smaller businesses are more likely to be more severely impacted with such an outbreak.
It’s not an easy issue for employers to deal with – we all need our people to be doing their jobs but we need our people to be as healthy as they can be and not to infect others. So how can you manage the dichotomy of this?
Let’s deal with sick pay first. If an individual is unable to attend work due infection or self-isolation, it is likely that they will be eligible for Statutory Sick Pay (SSP) and it is good practice to apply any contractual sick pay in the same manner. Remember that people are unlikely to be able to produce a medical certificate as the advice is to stay away from GP surgeries so you may need to relax your certification requirements. For employers with less than 250 employees, the government have confirmed that they will refund up to 14 days SSP for coronavirus related absences and that SSP should be paid from day one of the absence. Waiting days and other usual SSP provisions remain unchanged for sickness absences unconnected to coronavirus.
Small business cannot always afford additional Company Sick Pay (CSP) and in such instances, people (particularly those in lower paid roles) may try to attend work when they are unfit or potentially contagious. A good way to head this issue off is by communicating to your people before it becomes an issue. Be clear on what payment options you are prepared to make in such circumstances without setting a precedent and remind people of their responsibility to their colleagues. This doesn’t need to be in a heavy-handed manner and can be wrapped up with other general advice about good hygiene in the work place. As I mentioned in my previous blog about extreme weather events, you may permit people to request paid holiday but, again, you cannot enforce this.
Where containment is a high priority, it is a good idea to exclude sickness absence due to highly contagious illnesses from any sickness absence trigger points if you have these as a way to discourage people from trying to attend work when they are a potential risk to others.
If you ask someone who is not actually sick but you suspect that they may be at risk of infecting others not to attend work, they will be entitled to full pay. The government have now required anyone who has recently travelled to an affected area to self-isolate for 14 days. In this instance, SSP rules detailed above would most likely apply. I have heard of one organisation who is vetting holiday plans to try to head off fake self-isolation but I wouldn’t recommend this approach. Let’s face it, if your employees are so demotivated that they will go to such extremes, you may have bigger problems on your hands.
You may also need to consider a carer or a parent who is required to care for a family member who is unwell. There are statutory unpaid leave options linked to this such as dependants leave and you may provide additional leave (paid or unpaid) under your own policies.
Another way round the issue of containment could be to allow more working from home for an agreed period – my blog on extreme weather events also covers this point.
Ultimately, how you decide to handle any sickness absence and payments when facing these types of events is a decision about affordability and how flexible your business can be but, as with any unusual event, it is sensible to be proactive and clear in your communications, taking the most reasonable approach you can while remaining commercial.
The level of contamination and advice been given by the government has reached a point where businesses may no longer be able to carry out some or all of their activities. So what happens if you have to cease activity or there is a forced shutdown? Clearly this is a moving piece and it could change over the next few weeks but here are some of the current options available:
If you are required to close the business and/or customer demand is such that there is insufficient work for a group of employees, the following options are available along with paying them full pay in the event it is a short period that is affordable:
Lay-offs: where an employer asks an employee to stay at home and not attend work or be paid for a temporary period.
Short-time working: where the employer requires their employee to work less than their regular contractual hours, for example a three-day week.
You can only implement lay-offs or short-time working if there are express, correctly drafted clauses in their contracts or by obtaining consent from your employees. Employees may agree to this if they feel their only alternative may be redundancy.
Employees with at least one month’s service who fall within the criteria will be entitled to a small fixed statutory guarantee payment to partially compensate them for the reduction in salary. The guarantee pay during lay off or short-time working is currently a maximum of £29 a day for 5 days in any 3-month period - so a maximum of £145. Clearly, you could agree to pay more than this.
Employees who are affected for longer periods may be entitled to redundancy pay. The employees must resign with written notice of their intention to claim this. You can avoid redundancies if you can guarantee employees 13 consecutive weeks of work within four weeks of receiving the employee’s notice.
In the current situation, if you are forced to close/stop activity to prevent the spread of the coronavirus, you will still have to pay employees in most cases but lay-offs and short-time working may give you greater flexibility and savings on salaries during a temporary cessation subject to the above contract clauses or consent.
In addition to the agreement to allow small businesses to claim back SSP mentioned above, they are introducing a new temporary “Coronavirus Business Interruption Loan Scheme”. Banks will offer loans of up to £1.2 million to support SMEs. The government will offer a generous guarantee on those loans covering up to 80% of losses with no fees so that banks “can lend with confidence”. This could offer some SME's a lifeline with their cash flow issues during the crisis.
ACAS have issued some guidance for employers on Coronavirus and if you have a particular query that you need advice on, 2020 HR will be happy to help.