One of the challenges for execs in growth-stage companies is staying compliant with employment law and regulations that cover foreign workers, regardless of where they live.
Compliance with sick leave policies, redundancy situations and worker privacy rights is confusing enough under normal circumstances. Now with Covid-19 disrupting businesses around the globe, new UK responses to the pandemic are making the challenge even greater.
We asked Eynat Guez, founder and CEO of global payroll company Papaya Global, to help us understand the new guidance from the UK due to the pandemic, and what businesses with UK employees need to know.
Q: Let’s start with some of the most recent news around the UK’s response to Covid-19: the sick pay reimbursement plan.
Guez: This is good news for both workers and employers in the UK. In late March the government announced that any company with fewer than 250 employees (as of February 28, 2020) is eligible to be reimbursed for any employee who takes sick leave payments due to the coronavirus. Of course, this applies only to employees who live in the UK.
To apply for this reimbursement, the employer must keep careful records of all absences and sick leave payments while the employee will need to provide a medical certificate. Keep in mind this situation is changing quickly so there may be more updates to come on this.
Q: What other kind of protection is available for UK workers?
Guez: The government has announced it will pay up to 80pc of a person’s salary if they can’t work due to the pandemic. For example, if a florist shop has to shut its doors, they can furlough their workers and apply for a grant to cover up to 80pc of employee salaries for up to three months with a limit of £2,500 per month per person. The hope is this will go a long way toward protecting workers’ jobs by keeping businesses solvent so there are jobs to come back to.
Q: So let’s talk more about sick leave and COVID-19; does the employee have to actually be sick with the virus to take sick leave?
Guez: UK government guidance tells us that employees may be considered a ‘risk factor’ if they have developed Covid-19 symptoms or live with someone who has; in these cases, the employees should self-isolate.
If they are not able to perform their work from home, then the leave would be covered under the employer’s usual sick absence procedures. This can also apply to people who are in higher risk categories, like people over the age of 70, or anyone with an underlying health condition that puts them at greater risk, including pregnant women.
Q: So an employee, who’s not ill, not exposed and not in a risk group can’t simply decide not to work?
Guez: Correct. Generally an employee cannot refuse to come into work without repercussions. However, this is a fluid and unusual situation, and the employer has an obligation to preserve trust and confidence in the employment relationship. This means employers should speak to employees to understand the reason for their refusal and whether they have genuine concerns. For example they may be in a high risk category, or have family situations or other factors that might cause them to follow the government guidance against coming to the workplace.
It’s a bit tricky, especially for companies that are not familiar with UK employment practices. My recommendation would be to talk to someone qualified to answer these kinds of questions as they apply to your specific workplace. Mishandling this or choosing to initiate disciplinary action on any employee who refuses to come to work could have negative PR implications and could possibly result in legal pushback by the employee.
Q: What about unpaid leave? Is that an option?
Guez: That depends on the existing conditions of your UK team member’s employment contract. If you are temporarily unable to provide paid work, you may be able to offer unpaid leave, but only if that option is in their existing contract.
There is the option to negotiate reduced working hours, up to 80pc of their normal hours, to avoid having to dismiss an employee for redundancy. This must be a mutual agreement between the employer and the employee, since it’s considered a change to their original employment contract. This process can get a bit complicated, especially if there are trade unions involved or if the employee does not agree to the reduced hours.
If an employee doesn’t agree to the reduced hours, the employer does have the right to dismiss the worker based on redundancy. Hopefully the grant program from the government will be able to help businesses afford to keep employees on rather than dismiss them altogether, but it is within the company’s right to do so.
Q: Tell us a little more about the rules around employer-initiated redundancy.
Guez: When choosing to go this route, UK employers must be careful to ensure that all selections for redundancy are made fairly and without discrimination. There is a consultation process that must be followed, and collective consultation if there are more than 20 redundancies planned in a 90-day period. The aim is that the employee and employer will come to some kind of agreement during this consultation process, but that’s not always the case.
Employees with more than two years of continuous service must be given statutory redundancy payment upon exit. Payment amount is based on the employee’s age and how long they’ve been employed, counting back from date of dismissal:
- Employees receive 1.5 weeks’ pay for each full year of employment after their 41st birthday
- A week’s pay for each full year of employment after their 22nd birthday
- Half a week’s pay for each full year of employment up to their 22nd birthday
- Length of service is capped at 20 years and weekly pay is capped at £525. The maximum amount of statutory redundancy pay is £15,750.
Generally, in the UK if a worker is willing and able to work – either at home or in the workplace – but is told not to by the employer, they would continue to receive their usual pay and benefits. In many cases, it might make more sense for the employer to apply for the grant to cover 80pc of their UK workers’ hours for three months rather than make the employee redundant and be responsible for their redundancy payments.
In some cases, though, redundancies might be unavoidable. If this happens it’s important to have solid guidance around the UK employment law on redundancy to avoid possible consequences down the road.
Q: Many questions are arising around worker privacy and Covid-19. What are the employee’s responsibilities if they believe they might be sick?
Guez: Employees are obligated to let their company know if they or someone they live with have developed symptoms. This classifies them as a ‘risk factor’ to the workplace, and they are required to let their employer know and to self-isolate. And since employers have a duty to maintain a healthy work environment, under the Health and Safety at Work Act of 1974, requiring employees to self-disclose or carry out a risk assessment would be prudent and acceptable, according to Baker McKenzie.
Generally it is not acceptable to ask your employees to report other co-workers who show possible symptoms. This would be considered an invasion of privacy. However, during this pandemic situation the government has a less strict approach to privacy in the interest of public safety. A comFpany may put a reporting channel in place with clear guidelines and limited access to any data reported and still stay in compliance with the law. An employer still cannot require their employee to see a doctor; they may ask them to but cannot force them to do so.
Balancing the privacy of the employee against the safety of the entire workplace is tricky, so expert guidance is recommended.
Q: Can employees refuse to travel or attend in-person meetings?
Guez: For the most part, yes. Social distancing continues to be the recommendation for all UK residents; we should encourage working from home whenever possible and help our employees avoid any non-essential use of domestic public transport. Non-essential business travel would fall under this recommendation and should be avoided whenever possible. The government has advised against all but essential international travel and this advice may impact your company’s travel insurance coverage.
The bottom line is clear: all companies should carefully assess whether travel and meetings – either within the UK or abroad – are truly essential. Only in exceptional cases would an employer be justified in insisting that an employee travel during this current situation.
Q: Any final comments on things UK employers need to know?
Guez: The world of work is changing daily as we realise the realities of life these days. Many of these situations are still falling under existing employment contracts. For example, if a parent’s child care provider is closed, they may be able to use their parental leave to cover the gap. UK employment law provides unpaid dependent leave and unpaid parental leave of up to four weeks per child per year as well as annual leave opportunities. Employers are not obligated to provide any additional paid time off due to Covid-19, although some companies are being rather generous about this. It’s very important that any additional benefits be granted fairly and without discrimination to avoid possible legal challenges later on.
UK employment law is complicated. And they are being further complicated by this pandemic, for obvious reasons. My advice is to do your homework and seek out qualified HR compliance advice quickly. This will help you leverage the available grant and loan opportunities more effectively and will help you and your employees continue to work together through and after the current crisis.
Eynat Guez is the founder and CEO of Papaya Global.