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 Act is intended to facilitate the rescue of businesses that are in financial difficulty by preventing suppliers from invoking certain termination clauses under a supply contract, and therefore maintaining supply of goods and services to the business whilst plans to save the business can be considered.
Supply contracts often contain a clause enabling them to terminate the contract, or take other steps such as requiring payment in advance, in the event that the customer enters an insolvency procedure.
This new Act removes any such contractual right by dis-applying any clause that allows the supplier to terminate the contract, or take any other step, due to the customer entering an insolvency process.
Suppliers are also prevented from demanding payment for pre-insolvency debts owed by the customer as a condition of continued supply.
Additionally, where the supplier had a contractual right to terminate the contract due to an event occurring before the customer went into the insolvency process (whether or not linked to payment issues), the supplier loses this right for the duration of the insolvency process.
You must exercise reasonable care in assessing status and making a status determination, considering what the position would be if the contractor was engaged directly by the end user client instead of via a PSC.
Status is usually determined by looking a number of factors and how they apply to the contractor’s working arrangements. This is a difficult exercise that is usually carried out by employment and tax lawyers and it is full of grey areas. We have a toolkit that can help you navigate this process which Paul will tell you more about at the end of the session.
The key factors used to determine status are:
- Control:
- How much control does the end user client have over the contractor in terms of working arrangements (hours, place of work) and how the work is carried out? Or is the individual contractor able to determine how and when they work and without direct supervision of the end user client?
- Personal service:
- Is the contractor required to perform the services personally without the right to send a substitute? If there is a right to appoint a substitute is this subject to end user client approval?
- Mutuality of obligation:
- Is the end user client obliged to provide the contractor work with a mutual obligation on the contractor to accept that work?
You should speak to your advisors. We do not know presently how existing petitions will be dealt with by the Court. We do know that if any winding up order is made (based on a petition presented after 27 April), it could be found to be void and a creditor may face challenges. Even for petitions presented before 27th April, there is a risk that the Court will not be keen to make a winding up order so it is important that you look at the facts of your debt and weigh up all of the factors before deciding how to proceed.
The Commission has provided guidance as to measures which Member States can introduce without notification. These include:
- Measures which apply to all businesses within a Member State (for example the furloughing measures introduced by the UK Government)
- Measures providing support direct to consumers
- Measures which are already exempt from the notification requirement (discussed further below).
To respond to the crisis the European Commission has also issued a temporary framework to provide a basis for emergency aid to be notified for approval. The framework is initially in place until 31 December 2020. The Commission continues to keep this under review and has twice widened its scope to allow more types of aid to be notified. The type of measures covered include:
- The provision of guarantees (including guarantees for 100% of loans)
- The provision of loans at low interest rates, at zero interest rates or subordinated to senior debt
- Measures to support liquidity needs or to alleviate difficulties caused by the current crisis
- Measures to recapitalise businesses
- Measures to assist sectors hit particularly hard by the current crisis (eg transport)
- Measures targeted at COVID-19 such as research and development or production of products related to tackling the virus
The Commission has approved a UK Government “umbrella” notification to allow UK public authorities to adopt the measures permitted by the Commission framework. Therefore public authorities in the UK can use the Framework without notifying individual measures or schemes to the Commission.
The reality of these unprecedented times is that enforcement of health and safety legislation by the HSE (particularly through the criminal courts) in relation to Covid-19 is an extremely unlikely outcome.