A lot can happen in a week - 3rd April 2020

This piece is a brief follow up to my previous blog on Furlough.

I put out my initial thoughts on the new concept of Furlough leave the weekend that the Chancellor made his announcement.

What followed, it is fair to say, was two weeks of mania – seeking to clarify the guidance and deal with a massive amount of client enquiries. 

Solicitors, HR professionals, Accountants and other professional advisors pulled together brilliantly to help their clients (existing and new) to come up with new strategies with regards to their work forces and to help retain as many of their employees as possible. The accountants and financial advisors were also looking at loans and other funding options optimistically alongside the Furlough provisions.

(to be clear here I also take my hat off to the banking sector employees and those in the civil service processing the massive amount of Universal Credit claims. A massive shout out also to those toiling in the NHS who are doing an amazing job and for whom we are all clapping on our doorsteps on a weekly basis and to everyone in the country whom the lock down has impacted upon)

With an eye on business for now though, and with the odd exception, the businesses and clients that we have worked with have been overwhelmed in the same way as their employees but have acted honourably and professionally and to all the business owners out there large and small keep going you are doing your best and a brilliant job.

So, I asked myself what might you find interesting by way of insight in the area of employment law and beyond and with which I have been involved in the last 2 weeks? I would encourage discussion here; I set out what I have struggled with below:-

1.      We have seen a number of calls from employees about being forced to work in environments which are not compliant with government guidelines regarding Covid-19 and social distancing. Some have been compelled to work and have done so for fear or losing their income, others have been dismissed for raising concerns or for refusing to work. A client of mine was in a queue of 119 people to their home and contents insurer when attempting to confirm whether or not their dismissal claim would be covered and how to start a claim. Whether all of these calls were for legal expenses cover who knows but certainly the insurers have been very busy.

With most employees now realising that they may have legal expenses cover to fund a claim employers who are flouting the rules beware. There is absolutely no merit in surviving this lock down to come out facing an array of employment tribunal claims.

2.      The other issue has been retractions of notice and reinstatement of employees who have been made redundant in March as a result of the virus. Most people understand that the scheme is a job retention scheme and are using the scheme for its intended purpose. Of course, those who were made redundant as a result should be re-employed if possible. I am aware of some employees however who were in the process of working notice as a result of resignation (in some cases submitted over 3 months ago) wanting to use the scheme because their new role has been withdrawn or start date delayed. 

They are approaching the company from which they have resigned asking for them to accept retraction of notice and then to be furloughed for two months. 

My view (and it is my own) is that the scheme is intended to avoid legitimate Covid-19 related redundancies during this time. It is not intended to tide people over who have resigned from one employment to go to another. 

The scheme is called a job retention scheme. These employees will not be retained when the lock down is lifted. 

The other concern is the employment law implications for employers. Say they allow a retraction of notice but then after the lock down the employee does not wish to leave. Do they have to dismiss? Do they owe a redundancy payment? Do they have to pay notice again? What about accrued holidays? This is a minefield and though I am appreciative of the position of employees who have resigned and the predicament they may be in there are other options for them. I’d be interested to hear other people’s thoughts on this. I keep repeating to my clients that the law has not changed. Please do consider the implications before making decisions

3.      Free money- There has been a misconception in my opinion that the loans being offered are either easy to get or are effectively cheap or free money and this is something to be exploited. This is of course not the case. Whilst there has been an initial flurry of loan enquiries and applications my understanding from my professional contacts who specialise in this area is that some businesses who may not have needed or currently need a loan were seeing this as an opportunity to take borrowings. I have also seen enquires about adding people to pay role to retrospectively furlough and other ingenious ideas to take what some (not many) but some people think is a pot of money to be drained even in the event it is not needed. I do believe that most businesses are using the schemes properly. If you are one of the few who are not then I say be careful and beware.  

For those genuinely concerned please speak to the professionals – be careful about personal guarantees. Don’t take a loan unless you know you can repay and continue to trade out of the lock down. If necessary, take insolvency advice. There are so many advisors out there who will help you to establish the best route for your business and your employees and they are not profiteering from this crisis. 

4.      As a small business owner myself with 12 employees I can feel the pain of the lock down. The ￡10k grant we have been promised has yet to materialise but I am hopeful of this for April. Our landlord is negotiating with us on a rent holiday but is this just delaying and accruing debt? Will we even need an office when all this is over ? Remote working has worked well and cloud-based technology is amazing (we thank the brilliant ETI Cloud for their service during this time). With the exception of the phone networks being over loaded and not to mention everyone in the house (except the dog) using the wifi, what’s not to like? Personally, I love working in the office and I am missing my team like crazy but it has opened my eyes to other possibilities rather than renting more space and taking on that additional liability. 

We will all have to furlough I suspect if this continues. How can I for example supervise trainees effectively remotely? It’s all based on attitude to risk and also future finances.

I’d be interested to know if any of you are looking here at a 3, 6 or 9 month plan for finances and forward planning. I spoke to a business owner recently whose aim is for everyone to attend the Christmas party. Seems like a long way away but is it really?

5.      As a director of a limited company I am not supported personally by the government. I feel this as much as the other millions of people out there and of course I cannot furlough myself and continue to trade really. So what are we doing? We are making the best of it, reviewing our websites, launching new ones, tailoring our ad words, working on our 10-year business growth plan. Why not? I haven’t had time for years to look at the business rather than work in it.

It’s positive and may prove fruitful and I am really appreciative of all the great ideas coming in from the team.

6.      Finally, and on a more personal note a lot of you will know that I lost my father just over a month ago. Thankfully we were able to stay in the hospital for a week with him and give him a good send-off but my heart aches for those who are currently missing their relatives due to sickness or isolation. It’s so important that no matter what else is happening in the world that good health is appreciated. If you are running a business and you employ people you need to remain fit and healthy for them and for your own families. Take time out for your hour a day. Walk your dog (who will be loving the lockdown) facetime your colleagues and your family and keep yourself well connected, fed and watered.

Help your staff now. If you have a mental health first aider speak to them get them involved.  Why not commit to get colleagues trained if you haven’t already- I have been a mental health first aider now for a few years and it’s helped me enormously not just at work but with clients and in understanding people and their reactions better.

Any employee assistance will be appreciated.

Melanie Bryan OBE said to me last week that it’s how you turn out now (i.e. in crisis) that will be remembered.  It’s so true. If you don’t have any support for your team why not think about addressing that now. It’s not expensive in the main to put in place. Retention of good staff may be difficult if you don’t stand up now.

My co director Laura returned from maternity leave this week and I have massively appreciated all her support throughout this. Working together and taking hard decisions in a united way has helped massively to manage the stress.

So, to end I don’t think all is yet lost. Things are already calming down and Im hoping that when we all come out the other side, we continue to support each other and make up for this short period of lost time.

In the meantime I’m happy to take any questions if my contacts need support or help and would appreciate any comments and shares on this post that you think others may find useful.