How do you manage employees who aren’t furloughed and are unhappy that they still have to work?
Although there is no formal selection process that must be followed in order to furlough staff, the basis for selecting who will be furloughed should be explained to all relevant staff. Basing this on work levels, required skills or whether work can in fact be carried out efficiently from home will help this process. Staff can be invited to volunteer to be furloughed or re-furloughed. Any requests can be considered on a case by case basis. It may be that a particular skill set is required which may result in an employee’s request being refused.
Related FAQs
The Flexible Furlough Scheme, ‘FFS’ an unfortunate acronym, allows employees to work for some of the week and be furloughed for the rest.
Directors of a company that is in, or potentially facing, financial difficulty have a duty to act in the best interests of creditors as a whole. Failure to comply with that duty can have consequences for directors (including personal liability and disqualification if directors get it wrong).
The duty to act in the best interests of creditors as a whole begins when the company is (or in some cases is potentially or at risk of becoming) insolvent i.e. its assets are worth less than its liabilities and/or the business is unable to pay its liabilities as and when they fall due. However, just because a company is insolvent doesn’t always necessarily mean than an insolvency process is inevitable. Sometimes, the insolvency might just be caused by a temporary cashflow problem or perhaps wider problems in the business that can be overcome by making changes to the business itself.
In addition to that, the potential liability of directors ramps up even further when the company reaches the stage that the directors have concluded (or ought to have concluded) that there was no reasonable prospect of the business avoiding liquidation or administration. If the business reaches that stage, in addition to having to act in the best interests of creditors as a whole, directors can find themselves personally liable unless, from the time the directors ought to have reached that conclusion, they took every step that they ought to have done to minimise the loss to creditors. This is known as wrongful trading.
On the 25th June 2020, the government introduced new legislation – the Corporate Insolvency and Governance Act 2020 – which includes measures to temporarily relax the rules around wrongful trading with the proposed changes to take effect retrospectively from the 1st March 2020. Essentially, the changes say that any court looking at a potential wrongful trading claim against a director is to assume that the director is not responsible for worsening the company’s financial position between 1st March 2020 and the 30th September 2020. Whilst the wrongful trading rules have relaxed, directors still need to proceed with caution if the business is potentially insolvent as the new Act does alter other potential pitfalls for directors, like the risk of breaching their duties or allowing the company to enter into transactions that can potentially be challenged.
The support being offered by the government is potentially a lifeline for businesses under pressure through no fault of their own, but notwithstanding the recent changes to the wrongful trading rules it is still likely to be important for the board to carefully consider whether it is appropriate to make use of the loans, grants and tax forbearance that are on offer.
Exactly what the board should consider will vary from business to business and getting it right can sometimes involve balancing several different (and at times conflicting) priorities, challenges and concerns.
If you sponsor migrants under Tier 2 or Tier 5, you will not be required to report a sponsored employee’s absence if it is linked to coronavirus and you have authorised this absence e.g. they are self-isolating and you have received an online isolation note.
The Home Office has confirmed that sponsors do not need to withdraw sponsorship for affected employees who have been absent from work for more than 4 weeks if they consider these are exceptional circumstances, which would include absences related to coronavirus. It does however remain extremely important to know where your sponsored workers are and to have up to date contact details.
Failure to comply with the individual consultation obligations could render the dismissal unfair and expose you to a financial penalty of the lower of up to 1 years gross pay or the maximum statutory limit (currently £88,519).
The Bill allows the Secretary of State to make regulations to temporarily extend various filing date deadlines for companies. These include deadlines for filings accounts, confirmation statements, charges register, director and secretary appointments and resignations. The extended period must not exceed 42 days where the existing period is up to 21 days, or 12 months where the existing period is 3, 6 or 9 months.