HOSPA Webinar - 3rd June, 2020

HOSPA Legal Update - Furlough, Employee Rights, Redundancy Risks

 

​The rapidly changing landscape and Government grants will be explained by our expert - Emma O'Connor. This will be an interactive session, so please send in questions to HOSPA@HOSPA.org or ask live on the day!

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ATTENDEES

• (JP) Jane Pendlebury - CEO, HOSPA

• (EC) Emma O’Connor, Head of Training, Boyes Turner LLP

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Agenda

00:00 Introductions 

 

03:00 

Emma: Thank you to HOSPA for inviting me to present today. I’m Emma O’Connor, head of training at Boyes Turner solicitors. I have a lot of clients who are using the job retention scheme, so I thought it would be useful to kick start this webinar with a ‘Poll question’ for you all. The question is: “How many of you are using the job retention scheme?”

• 90% of people watching the webinar are claiming under the job retention scheme. 

• 5% said no.

• 5% said they’re not sure.

These are the current statistics that are on the HMRC’s website, too. These figures were up to date as of yesterday. The total support package from the government is thought to be up to £300 billion.

 

06:00 Job Retention Scheme | Key issues:

• Clear communication

• Remember to follow employment law and contracts

Tip: look at the original furlough letters that you distributed to your employees and re-visit them to make sure they are all up to date giving the recent updates.

• Will employees accept the change?

• Redundancies

• Holidays and holiday pay

Tip: Holiday pay will require the employee to be paid 100% of their normal wages.

We have lots of people who are working but are accruing holiday, which is frustrating as what employers don’t want is for employees to take their holiday when they’re back from furlough, as that will disrupt the workflow.

Some employees are designating their employees to take holiday. However, you need to give them notice. For example, if you want an employee to take five days holiday, you need to give them twice the amount of notice, which means ten days notice, in this example.

For key workers/frontline workers, rules will allow employees to carry over their holiday into 2021. Designed for our frontline workers/key workers.

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15:00 QUESTION from Jane: As we start to lift the lockdown within the hospitality industry, what advice can you give to businesses?

Emma: There will need to be a lot of workforce planning, for example, a lot of businesses are taking a ‘Two-tier’ (on-site employees or furloughed employees) or ‘Three-tier’ (on-site employees, remote employees or employees on furlough) approach. Also, do remember you can rotate your furlough workers, so three weeks on, three weeks off (remembering that furloughed employees need to be on furlough for a minimum of 3 weeks). This might help individuals back into the business.

 

23:00 QUESTION from Jane: Can you explain the latest changes to the Job Retention Scheme?

Emma: There have been three main changes to the scheme. The first being Flexi Furlough, the second being the Closing of the job retention scheme to new applicants and finally, Tapering of the grant.

Flexi Furlough will come into play from the 1st of July, where employers will be able to bring employees back on a part time / shift basis. The hours can vary from week on week. The key point: Employers are going to have to find a mechanism where they can record what hours the employers undertake. But ensuring they keep the data until October 2025.

 

27:00 QUESTION from Jane: Do you see any difficulties with the Flexi furlough addition?

Emma: Yes, I do. The main issue is going to be about how will the employer accurately record the number of hours that the employee works when they’re on the Flexi Furlough scheme? Maybe they will have to look at the average working hours, similar to the average wage.

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QUESTION from Jane: If we do bring back furloughed employees, what is the situation with the employees who didn’t go on furlough, and that have agreed pay cuts?

Emma: Obviously, if we bring the furloughed employees back, who haven’t had a pay cut, this then won’t be fair to the existing employees who didn’t go on furlough. This is an area where we do need some clear guidance on.

 

QUESTION from Jane: We’re getting a lot of questions about the second change, which is that the job retention scheme is closing to new entrants, can you elaborate more?

Emma: The scheme will close from 30th of June 2020 to new applicants. However, new furlough employees need to have been entered into the scheme by the 10th of June.

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QUESTION from Jane: Is there a limit on a number of claimants? 

Emma: It looks like it could be a one in one out system with some caps. However, if you have employees who have returned to work, you should be able to add some new claimants to the scheme. 

 

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35:00 Emma: From August, the government will continue to pay 80% of employees wages, caped at £2,500, however, employers will have to pay pension and national insurance contributions. 

From September, it changes again slightly, where employers need to start contributing to employees’ actual wages. The government will pay up to 70% of wages, caped at £2,190, meaning employers will have to pay 10% of their employees wages, along with the contributions to the pension and national insurance. 

From October, this reduces a further 10%, meaning the government will pay up to 60% of wages, caped at £1875. Meaning employers will then be paying 20% of wages, plus employers the pension and national insurance. The job retention scheme will end in October.

 

42:00 QUESTION from Jane: Are employers still able to top up their employees wages?

Emma: Absolutely, employers are able to top up to 100%. It might be a time to look at the terms of your furlough scheme, however, you do need to write to your employees to let them know of any changes.

 

45:00 QUESTION FROM Jane: Should businesses be making redundancies at this time?

Emma: The scheme states that employers can make redundancies at this time. However, I advise you to start these within good time. Depending on the number of proposed redundancies, a consultation must have taken place either 30 or 45 days before dismissals can take effect.