As a business owner you are likely to be nervous about the current and potential ongoing impacts on your business as a result of the Corona virus outbreak.
Some of our clients are already starting to think about how they will go about reducing the size of their team or creating themselves flexibility in their workforce through a period of uncertainty and disruption. Here I will explore several potential options to consider which may be appropriate in the event of a downturn in business that could prove helpful which are:
1 – Homeworking
2 - Annual leave
3 - Reduction of hours
4 - Zero hours workers
5 - Unpaid leave
6 - Termination of employment
7 - Lay off and short time working
1 – Homeworking
You may work in an industry where it is possible for you and your team to work from home. The current guidance is to take this approach where possible. This could be a great way of keeping business disruption to a minimum however you will need to consider the practicalities of working in this way.
2 – Annual Leave
It may be appropriate to ask employees to use some of their annual leave to cover a period of absence from work. Whilst ideally you will gain agreement from employees to take leave, in the event that you don’t get agreement, as a business owner you have the right to enforce holiday being taken however an employee is entitled to notice equal to twice the length of the amount of holiday you are insisting they take.
3 – Reduction of hours
With agreement from your employees you may temporarily reduce their contractual hours, and in turn their pay, so that you can reduce your wage bill temporarily. This must be done with care and expressed permission as without clear agreement from employees this could result in claims being made for unlawful deductions from wages.
4 – Zero hours workers
For anyone working in your business on a zero hours arrangement you do not have an obligation to provide work. In the event of a downturn in work, you may choose not to provide work to your zero hours workers enabling you to positively impact your wage spend on an indefinite basis.
5- Unpaid leave
You may be able to reach an agreement with employees to take a period of unpaid leave. Although they will not receive pay for this time, they will remain employed with continued service. This will buy your business some space around wage spend however if you take this approach it is vital that this clearly agreed to avoid any potential for claims for unlawful deductions from wages.
6 – Termination of Employment
For employees in your business with less than 2 years’ service, if you make the difficult decision to make dismissals this can be done without the need to go through a lengthy consultation process. These employees would be entitled to work or be paid in lieu of their notice period and receive payment for any holidays accrued but not taken up to the date they leave the business.
Employees with less than 2 years’ service are not able to bring claims for unfair dismissal however care should be taken that there are no other grounds under which they may be able to pursue a claim. If reach the point where you intend to dismiss employees, I would recommend getting specialist support to ensure that levels of risk are kept to a minimum.
7- Lay off and Short time working
Lay off is a period where you ask staff not to attend work for a period of 1 day or more. There isn’t a maximum time you can lay off your employees however they can request redundancy, and therefore redundancy pay, if they are laid off for 4 weeks continuously OR for 6 weeks during a 13 weeks period.
Short time working is when you reduce the working hours of your employees.
In the case of lay off and short time working, employees should receive full pay unless they have a clause in their contract allowing for unpaid or reduced pay lay off.
Employees who have worked for you for a minimum of 1 month, are available to carry out work, have not refused reasonable alternative work and have not been laid off as a result of industrial action are entitled to statutory lay off pay.
I sincerely hope that your business continues to thrive in these challenging times but if changes need to be made around your people, I hope this blog helps you consider the options available to you.
It is important to have in mind is that any action you may decide to take at the appropriate time should be taken following the correct procedure to reduce the risk of claims for unfair dismissal, discrimination, breach of contract or unlawful deductions from wages.
If I can be of assistance you can get in touch by sending me a message via the Black Kat HR website, send me an email at firstname.lastname@example.org or alternatively give me a call on 0773 8050147.