Coronavirus Act 2020 – employment law measures
26 March 2020
The Coronavirus Act 2020, which has now been enacted, introduces a new form of unpaid statutory leave for volunteers along with powers to establish a compensation scheme. It also makes changes to statutory sick pay (SSP) rules and indicates that the new job retention scheme for employers will be implemented by HM Revenue & Customs (HMRC).
Emergency volunteering leave
To help support essential health and social care services, the Act provides for all workers to be able to take emergency volunteering leave. Leave can be taken in blocks of two, three or four consecutive weeks during an initial volunteering period of 16 weeks. This volunteering period may be extended.
To take emergency volunteering leave, the worker needs to give their employer three working days’ notice and produce a certificate from an appropriate authority certifying that:
- they have been approved as an emergency volunteer; and
- they will be acting as an emergency volunteer from the date, and for the period, specified in the certificate.
Employers with a headcount of fewer than ten will not be required to grant leave, but all other employers will need to do so. There is no provision for employers to be able to refuse leave, for example because of operational need. It is not currently clear who will be certified as an emergency volunteer, except that they must be volunteering in health or social care.
While on leave, volunteers will be in a similar position to employees on family leave, in that their contract of employment will continue as normal apart from terms about remuneration. They will have the right to return to the same job, with their seniority rights preserved and on no less favourable terms and conditions. Employees taking emergency volunteering leave will have the right not to be subjected to a detriment or dismissed for doing so.
Emergency volunteers will be entitled to a travel and subsistence allowance from the government. They will also be entitled to compensation for loss of earnings, but only where they have lost earnings by volunteering. The Act provides that the government must compensate volunteers but includes a power to impose limits on the amount a person is entitled to claim, so it is not clear whether all workers will get their normal pay.
The scheme itself needs to be brought into force by regulations, so is not yet available for use by employees – we expect these to be published soon. Further regulations will also provide full details of the compensation scheme.
Statutory sick pay changes
Ordinarily, SSP is not payable for the first three days of sickness absence. The Act allows for the temporary suspension of these “waiting days” and also provides the ability for employers to reclaim SSP payments. The government had already announced in the 2020 Budget that it would disapply waiting days and refund small and medium-sized employers for up to two weeks of SSP per employee who is absent for reasons relating to coronavirus.
These changes will be made by regulations which have not yet been published, so they are not yet in force. The Act also allows the latest public health guidance to be used when determining whether an individual should be entitled to SSP, again subject to further regulations.
Job retention scheme and HMRC
At the end of last week, the government announced a new job retention scheme for employers, under which they will cover up to 80% of the wage costs of “furloughed” workers (up to £2,500 per worker per month), funded by a grant administered by HMRC.
The Act allows the government to give HMRC new functions in relation to coronavirus and coronavirus disease. This provision indicates that the details of the job retention scheme will be set out by HMRC rather than in separate regulations.
We hope that the HMRC guidance will be published soon. In the meantime, we have produced a set of FAQs on furloughing employees and the new job retention scheme, which answer key questions based on what we know so far.
Next steps for employers
We advise that employers should wait for further details of the emergency volunteering compensation scheme before deciding on their policy stance.
If volunteers will be able to claim full loss of earnings from the government, there is little to be gained by offering to maintain their normal pay during volunteering periods. This would simply mean that the volunteer suffers no loss of earnings and would be unable to make a claim. If, however, the payments are limited, employers will need to decide whether they will offer top-ups.
The alignment of the SSP rules with government guidance will come as welcome news for employers after all the confusion in recent weeks over who is entitled to SSP and in what circumstances. Of course, employers will need to consider whether to apply the same rules to company sick pay. Our recent survey indicates that employers are currently maintaining or even improving on company sick pay arrangements as part of their efforts to support staff in these unprecedented times.
We will continue to monitor developments, but for further guidance and support generally please visit our dedicated Coronavirus hub.
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