Contract and benefits reviews
As the impact of the Covid-19 virus becomes clearer, we are all working hard to put measures in place that will help us ride out the storm. Outside of the packages that the government has put in place – in the form of furlough, grants and loans – we wanted to share with you some other suggestions that you may not have had time to consider, as yet.
When your people are probably your biggest expense, it’s time to review employment contracts and benefits packages to see if some of these costs could be temporarily cut.
Your questions answered
We’ll be updating this page regularly as new questions come in. If you have a specific query you want answered, use the contact form here
If you have a clause similar to the lines in italics, below, then it should provide you with the opportunity to assign different duties on a temporary basis to some of your employees if the duties for their job roles have diminished:
‘Your key duties are set out in your job description. However, we may, from time to time, require you to work in such other capacity or carry out other duties for the Company without additional pay on either a temporary or permanent basis as the Company may reasonably require.’
If you are in any doubt, then you should seek advice.
This is dependent on your contracts of employment and what is stated within them. If you do not have a clause that allows you to vary them, then you will need to consult with your employees to seek agreement.
In the first instance, you should consider whether the government’s Job Retention Scheme is an option in the short-term (see the PDF download, above, for a full discussion of the scheme). If not, and you need to make employee’s redundant then you must put all affected employees on notice and carry out a reasonable, meaningful consultation if you propose to make less than 20 employees redundant. If it will be more than 20, then you will need to follow the statutory rules. Redundancy could be offered on a voluntary basis if that is something you can and want to accommodate or you can implement a selection criterion and carry out compulsory redundancies. It’s important that you fulfil your consultation and policy obligations. If you are unsure or have not carried out a redundancy exercise before, please seek HR advice.
Again, in the first instance, consult the government’s Job Retention Scheme for guidance. Within certain criteria, it enables employers to furlough staff temporarily while there is no work for them to do. However, preferable to laying off employees with no pay, the scheme covers 80% of their wages (up to £2,500 per month), NICs and minimum automatic enrolment employer pension contributions. To read the detail, download our comprehensive guide to furloughing staff, above.
Any such arrangement must be agreed in consultation with employees. Be wary of solely relying on any variation clauses in your contracts of employment; these will be subject to your duty to maintain employees’ trust and confidence. It will, therefore, be very difficult to rely on any such clauses to impose a contractual change. If you are considering this, please seek HR advice.
Again, during the current crisis, the government’s Job Retention Scheme might offer a preferable option for all parties.
The employee is entitled to work out their notice or receive a payment in lieu of notice, whether there is work available or not. That they are working from home does not affect this. Under these circumstances, payment in lieu of notice would be the best option.