With some non-essential retailers already returning to work, including places like car dealerships, it seems we are poised for another spate of re-openings over the coming weeks. The High Street will be opening up much more on 15th June, as many shops are able to reopen their doors, and there are strong indications that by 4th July pubs and restaurants may be able to open in some way.

There are a couple of very useful, free to download guides produced by the BSI and IOSH. For those of you who were not familiar with their work, IOSH is really the Institute for Health and Safety Consultants, but because that didn’t sound quite right, they have named it the Institute of Occupational Safety and Health.

The risk assessment guide from IOSH includes this particularly helpful graphic, and some very good advice on how to apply it. We have already written a couple of articles on creating a Covid Secure workplace, and Managing the Return to Work, this article in particular is a useful addition to it.

Understanding how to carry out risk assessments is crucial if you are to manage this very difficult disease in your workplace. Doing this correctly will protect both your workers and yourself. Identifying each risk and area of risk, and mitigating it properly through a staged response is vital.

In the BSI document, called Safe Working During the Covid 19 Pandemic, there are some very useful definitions and they share some of the best practices. It is keen to point out that it is not a guide to risk assessments, but it lays out some very good principles.

As you would expect from an institution that is extremely good at specifying standards and defining them very tightly, they are very careful about the words they use, and how they should be applied.

So, for instance, early on in the document they tell the reader that the following verbal forms are used in the following way:

  • “Should” indicates a recommendation
  • “May” indicates a permission
  • “Can” indicates a possibility or a capability.

Why is this important? Because such an approach much more tightly defines what until now look fairly loosely worded paragraphs. A bit like the legal definitions in a contract.

Later on, in their introduction, they say that they have used what the HSE recommend when developing a health and safety management system, a Plan – Do – Check – Act approach. Again, they define this quite closely:

  • Plan what needs to be done for the organisation to work safely
  • Do what the organisation has planned to do
  • Check to see how well it is working
  • Act to fix problems and look for ways to make what the organisation is doing even more effective.

Not a bad way of proceeding in the current climate to make sure that you protect your workforce, protect the organisation, and to demonstrate that you are taking safety and the risk of Covid 19 infection seriously.

Other areas that we particularly liked were clear definitions of the Clinically Vulnerable and Clinically Extremely Vulnerable in Section 3, Terms and Definitions.

The guide considers external issues that affect your workforce, such as methods of transport to work, which are not normally part of an employers’ concerns, but because of the pandemic are now very definitely fixed in their sights. It outlines very effectively how owners, Managers and other decision-makers should demonstrate leadership. And how they can encourage worker participation through communication, and opening ways for those with concerns and whistle-blowers to talk to Senior Management.

Categorise Work

For any organisations that are considering whether workers should return to the workplace, it suggests that organisations should divide work activities into three categories: 

  • can be done from home;
  • cannot be done from home, but can comply with social distancing guidelines in the workplace, if practical adjustments are made;
  • cannot be done from home and cannot comply with social distancing guidelines in the workplace;

In the latter category, employers must ask whether such an activity is essential for the operation of the organisation – it may only take place if additional controls (often PPE as the last resort) are implemented to mitigate the risks to health, safety and wellbeing at work.

Again, emphasising the principle of all health and safety legislation, it points out that it is not possible to eliminate the risks to Covid 19 entirely. But planning should aim to ensure the risk to workers is reduced to the “lowest reasonably practicable level”.

And, employers should make note of this, and communicate this clearly to their employees. No activity is 100% safe. Working from home, for instance, might be more dangerous for the workforce in the long run, as remaining static at home is not good for health. It certainly increases the risk of certain types of illness through physical inactivity.

But the employer’s job is to recognise control and mitigate the risk, making sure that their workers are protected as best they can.

Finally, and it is something that is often overlooked when planning, what happens in emergencies other than Covid 19? For instance, if there is a fire, clearly, especially in the case of panic, social distancing cannot be guaranteed. However, the need to evacuate the building quickly will almost certainly outweigh the risk from coronavirus.

Similarly, you may have to practice fire drills with a smaller workforce, and indeed make sure you plan carefully so that there is sufficient first-aid cover in the organisation, and that first aiders are trained in what needs to be done in the current circumstances.

RIDDOR

Both guides are excellent; however, we do take issue with the BSI in terms of one small but highly significant point. In section 10, they talk about the employer’s duty to report coronavirus under RIDDOR.

Coronavirus was legislated in March to be a notifiable disease, but the HSE has made it extremely clear that serious incidents need reporting where coronavirus is part of the occupation, rather than incidental to it.

What does that mean? The HSE website gives very clear guidance on the examples, of where an incident is reportable and where it is not. So, infections in the workforce are not reportable (though a widespread COVID-19 infection within a working team for instance may be classed as a RIDDOR dangerous occurrence and should also be reported to your local authority, who can give proper support and direction). But, where a worker works directly with coronavirus, for instance in a laboratory, the dropping of a vial of coronavirus and its escape into the environment is reportable.

A policeman contracting coronavirus by contact with the general public is not. There is also a very high level of proof required to identify that the coronavirus has been contracted at work, and not anywhere else.

This is not the impression given by the BSI, and we disagree with their guidance in this part of the guide.

Otherwise, both documents are excellent documents and well worth reading.  The links to these documents are as follows:-

IOSH:  Returning safely – Covid-19 Risk Assessment Guidance

BSI:    COVID-19 | Guidelines

Our Consultants would be pleased to advise you on any element of the issues arising from this newsletter.

As we reported yesterday, the Prime Minister launched the Government’s roadmap to exiting lockdown, ‘Our Plan to Rebuild: The UK Government’s COVID-19 recovery strategy’ on Sunday. A scheme to return us to normality, if that is ever possible.

He further clarified during his Monday evening briefing, that this is not designed to produce a rush of workers returning to their workplaces, but more of a series of “baby steps” to get the economy back up and running. He also stressed that employees should talk to their employers about returning. We would add that it is equally important that you initiate conversations about returning, or not returning because they are not currently needed.

A very important plank of this programme is ensuring that workers are safe in their working environment. And, that employers take the necessary steps to minimise any risk of spreading Covid-19 among their workforce.

So, we have been busy digesting the 50-page strategy document from Sunday, the accompanying Q&A and other publications. Last night, we got our first glimpse of the Covid-19 Secure Guidelines for sectors of the economy that the Government wants to come back to work.

Our first impressions are that these are very comprehensive and sensible. They have been drawn up with input and the agreement of business leaders, the HSE and unions.

Details of each of these can be found at the following links, for those who work in the respective sector or working environment.

It is important to point out that, for some organisations there will be crossovers. Life is never neat enough to have all of your workforce in just one category. So, if you feel that you don’t quite fit, study the two, three or four Guides that most closely fit your workplace.

A considerable amount of the content of each Guide will apply across all sectors, while some of the advice is specific to one or more environments, but does not apply in others. And, recognise the Government’s key message that employees should work at home if at all possible.

Their logic is simple, less social interaction reduces the spread of the disease. Less travel to work allows more space for those who have to travel and have no alternative.

Risk Assessment

The first, and most important consideration, is that every employer, however large or small, needs to do a Covid-19 risk assessment. For many, this will be a review of your current workplace risk assessment, a legal requirement which you should have already done. For some, it might be simpler to do a separate risk assessment, and for others, it might be the first time they have ever attempted such a document.

Whatever happens, you must understand that this risk assessment will be a crucial document. In the event that there is ever a claim against you, the quality of this document, and your ability to demonstrate that you have followed it to the letter, will be very important.

Health and Safety Representatives and Committees

If you have a health and safety committee, then you must consult on this risk assessment with them. And for workforces larger than 50 workers, employers must liaise with health and safety representatives.

Health and safety representatives will be crucial in this. So, not only should your initial Covid-19 risk assessment be shared with them, so should the identity of regular breakers of your protocol, so that corrective actions can be taken.

If your workforce numbers over 50, and there are no safety representatives in your organisation, then you had better ask for at least one volunteer, or you could ask for a volunteer safety representative from each of your key business activities. Please note, you are not able to simply appoint health and safety representatives, they must be suggestions from within your workforce themselves. Whilst you should avoid scaring them with ‘responsibilities’, you should seek to make the most of their experience and common sense.

Employers will need to continually monitor health and safety, making sure that workers are complying with their requirements to maintain a safe workplace, especially if you are gradually phasing people back from furlough to work.

Social Distancing

Social distancing is the first key principle in every part of every Guide. Keeping workers, customers, contractors and suppliers at a minimum of 2m, wherever possible, is essential.

Working out within the workplace how people can safely enter and exit, pass through pressure points, and share communal areas/equipment/facilities is as important as how they can safely work alongside each other.

Where social distancing is not possible, it is important that employers highlight this risk, and show what mitigating actions they have taken to reduce risk when this happens. Typically, such actions might include:

  • Increasing hand washing and cleaning in such areas;
  • Making activities where people are in close contact as short as possible;
  • Erecting screens and barriers to separate people;
  • Asking people to work back-to-back or side to side, rather than face-to-face;
  • Working in fixed teams or partnering, to stop the spread within the organisation if close contact cannot be avoided;

Each Secure Guidelines document, which, do not forget, has been drawn up with both business leaders and trade union officials, emphasises the importance of social distancing.

At work, where possible, setting up a one-way system for travel around the workplace is desirable, like we are already used to in some supermarkets. Marking out the workplace in 2m squares gives clarity, having a separate entry and exit point reduces pinch points.

Meetings

The placement of workstations and the screening between them makes work much safer. But employers should also be asking themselves how meetings can be safely held?

  • Are they strictly necessary?
  • Do they have to be in one room, or can they be outside?
  • Can they be done better via video-conferencing?
  • When they have to be held:
    • How long should those meetings be?
    • What preparatory work can be done before?
    • What is the follow-up work that does not have to be done in the meeting itself?

Common Areas

Particular attention needs to be made to exit and entry points, but also to reception areas, serving counters, toilets, canteens and communal meeting areas.

How many people, especially customers, are allowed in these areas at one time? How can they be separated? Is there enough hand sanitising around if there are no hand washing facilities?

Organisations have to manage visitors, customers and contractors. Do you have a formal visitor booking in procedure? Does the visitor have to fill this out themselves, can they use their own pen, or can you fill it out for them?

Travel to Work

Although for many employers, travel to work was not their problem before, now it is at least a consideration.

How can you mitigate the dangers of travelling on public transport, and arriving and leaving work? Can you make it easier to store bikes? Is walking to work a serious alternative? Are employees travelling together in company vehicles? Is there sufficient parking?

Washing and Cleaning

It is clear that hand washing and cleaning of surfaces is fundamental to safely working in this pandemic. Identifying surfaces that get touched regularly by many people is vital, as is putting in a cleaning routine to make sure the surfaces are safe.  Getting your workers to take personal responsibility for cleaning shared surfaces after they have used them is key to this.

Likewise, and this is a message that we have heard from the start of this pandemic, providing enough hand washing facilities, enough instruction about regular hand washing and, where that is not possible, providing hand sanitisers will also be very important.

Split your Workforce

Not only should employers split their workforce and potentially, especially when they are working in close proximity, establish fixed teams or partnerships, but they should also identify clearly those who can work at home, for instance office and accounts staff, compared to those who have to be at work.

Clearly, some workers may be able to spend three or four days at home, working, before they need to go to the office to perform certain functions or actions. Others might be able to split their day, and work before or after travelling to work, to reduce their exposure on the transport system, by travelling at other times, and by carrying out work at home where possible.

When considering those who can work at home, consideration must be given to those higher risk categories of workers, the extremely vulnerable and the vulnerable. Employers are also requested now to consider others at home living with your employees, especially the extremely vulnerable. Avoiding putting them at risk is viewed as important.

Do not Assume and Communicate

And, it is also easy to assume that certain groups would prefer to be on furlough, or be working from home. You might assume this of the disabled for instance, when in fact, they are not in a high-risk group and actively want to work.

The message is, clearly communicate with your workforce and find out what each of them feel they are capable of doing, and what they want to do.

Conversations with all parts of your workforce are needed. Whether it is those who are reluctant to turn return to work, those who feel vulnerable, or those who are running out of money and really want to return to work.

The Government has stressed that it expects employers to take socially responsible decisions with regards to its workforce. They are thinking in particular of employees with childcare responsibilities who cannot make alternative arrangements (like grandparents), without breaching social distancing rules.

Cleaning

Each Guide states that businesses that have been closed for some time will need a deep cleaning before reopening.

Your risk assessment should consider how frequently you clean shared areas, and shared surfaces. The clear implication is that this frequency should be sufficient to ensure minimal spread of the virus.

How often do you remove waste? If you used to do it every week, should that now be every day or even every hour?

And, while hand washing, sanitising and cleaning are clearly essential, and where you have goods inwards and outwards, what are your cleaning procedures there?

Personal Protective Equipment (PPE)

Government guidance is very specific. Personal protective equipment is only required in specific areas, mainly in health and social care, where the disease is more prevalent and social distancing is not possible.

The Government has made it clear that personal protective equipment outside these environments is not generally necessary. Nor do they wish to encourage it when it might take vital equipment away from where it is needed for front line workers.

They particularly talk about face coverings on, which they have been ambivalent from the start. There may be places, for example on public transport, where social distancing cannot be reduced and face covering may play a limited role.

But, for the majority of workers, face coverings are optional. Where employees want to wear such face coverings, they should provide their own, unless your risk assessment has identified it as being necessary, in which case you must provide and pay for it. However, employers should educate workers on the right protocol to use them. As they argue that face coverings worn incorrectly or removed incorrectly are more of a danger than no face covering at all.

Shift Patterns

Staggering the workforce, potentially reducing the workforce that is present by half while maintaining productivity, involves staggering shifts.

The recommendation in each of the Guidelines is that these shifts, once established, should be kept together. Mixing the shifts will increase the risk of spread between the shifts.

Staggering start times reduces congestion at entry and exit points. Alternating shifts reduces presence in the workplace.

Moving to double shifts may be the only alternative for some employers, who would otherwise have to make redundancies to halve their workforce. Especially when the Government’s support ends.

These messages need to be clearly communicated to the workforce.

Communication

Communication is vital in such times. Both to allay workers fears about returning, and to train them in the new way of working.

Things post coronavirus will not be the same as before. They have suggested holding a mini induction programme for returning workers, and a refresher course for current workers. This is relevant for workers who might be about to see a sudden influx into what had not been a crowded workplace.

Each Guide contains a number of posters that can be reproduced, and signage that can be used in the workplace.

It is the Employers’ Responsibility

Each of these Guides is very detailed, even if they are rather repetitive, if you read all of them.

We cannot emphasise enough that the responsibility for assessing the risk to your workforce, and the responsibility for ensuring that all risks are monitored and reported on, lies with the employer. And every workplace will have a different set of considerations. So, while we can provide you with a generic template to start from, you must carry out these risk assessments yourself.

You may not fall neatly into one sector or another, in which case, we suggest you read the bits that change between two or three different sectors, while studying in depth the sector that most closely matches your own.

If you need any help in getting started, let us know.

Our Consultants would be pleased to advise you on any element of the issues arising from this newsletter.

For all those first aiders out there, St John’s Ambulance has just issued new guidance this week on first-aid.

The emphasis is on the first-aider, as well as the patient. Keeping up to date with information, keeping themselves safe and protecting their own situation are now more important than ever.

Full details can be found here, but importantly their CPR advice now includes very strict guidance that the “kiss of life” as it is colloquially known, or rather more accurately Rescue Breaths, are now too dangerous to carry out under Covid-19. They suggest covering the victim’s face or mouth and nose with a towel, calling for help and carrying out other CPR measures until an ambulance arrives.

Their advice for all first aiders is summed up as:

  • Be aware of the risks to yourself and others
  • Keep yourself safe
  • Give early treatment
  • Keep yourself informed and updated
  • Remember your own needs

In the current climate with the prevalence of the COVID-19 pandemic, these skills become even more important. They then go on to advise how to apply these skills when managing a first aid incident.

The advice urges all first aiders to observe social distancing and safety measures, while nevertheless balancing the risk with the need to resuscitate a patient that may be in trouble from a heart, or breathing problem.

Handwashing with soap and water, or alcoholic gel are urged before and after any contact with the patient, in line with all current guidelines on keeping ourselves safe.

Sadly, their very excellent poster has not been updated, so it is inadvisable to use it.

Their advice does not go into detail on other minor first aid treatments, such as bandaging or removing a foreign object from an eye, all of which is hard to do with current social distancing rules.  So, review the normal type and frequency of first aid activities that you have.  If first aid support is regularly required, then extra PPE should probably be issued out to your first aiders to wear to give them the confidence and reassurance to want to continue offering their services.  It is probably best not to force a person to continue being a first aider if they would prefer not to, during the current pandemic as these are almost always voluntary roles.

The HSE has announced COVID-19 revisions

If there are fewer people coming into your workplace, it may still be safe to operate with reduced first aid cover. You could also stop higher risk activities, and the HSE suggest you could consider sharing first aid cover with another business, providing there is a good exchange of the type of first aid requirements each site may need. 

First aid certificate extensions

If your employees hold a first aid certificate that expires on or after 16 March 2020, and cannot access requalification training because of coronavirus, you may qualify for a 3-month extension. This applies to:

  • Offshore Medic (OM)
  • Offshore First Aid (OFA)
  • First Aid at Work (FAW)
  • Emergency First Aid at Work (EFAW)

To qualify for the extension, employers must be able to explain why their employees have not been able to requalify, and demonstrate what steps you have taken to access training for them, if asked to do so. 

Our Consultants would be pleased to advise you on any element of the issues arising from this newsletter.

Experts reckon that an interesting body of law is going to emerge from the coronavirus pandemic.

Prior to this, cases arising from employees who felt they had been harshly treated when they had refused to work, because of their perceived danger of doing so, were pretty rare.

Likewise, cases where employers were held to have treated employees unfairly were limited to just a few high-profile tribunal decisions.

We are fairly certain this is about to change. Because until now, dangerous workplaces were fairly well identified, and there were very strict procedures in place to manage the risk. And, there were employees who were judged, by and large, to understand the risks they were taking.

The problem is that it takes an extraordinary situation to produce difficult cases. Many employers may not like the results of judges’ deliberations.

The crucial piece of legislation is the Employment Rights Act from 1996. It  has been around a long time, and lays out the actions that workers can take if they believe they are in “serious or imminent” danger at work.

The Government has already stated that coronavirus poses a “serious and imminent” danger to public health. It will, therefore, not be too much of a stretch for Tribunals to rule that any workplace where social distancing and appropriate measures are not fully complied with, would present a serious and imminent danger to an employee.

And crucially, it is not whether the employer deems the danger to be serious and imminent, but whether the employee believes it is. This presents employers with a real challenge, because if they are to protect themselves, they need to be able to demonstrate that the employee was unreasonable in their belief that there was a danger, something that could be quite hard to do.

Once an employee has decided reasonably that under these terms the workplace is an unsafe place to be, there are a range of appropriate measures they can take. They could leave work, they could refuse to attend work, or they could take appropriate action to mitigate the danger themselves.

And by taking such action, the law lays down that they can neither be dismissed or suffer any detriment because of the action they have taken, providing it is appropriate.

What does this mean?

Obviously, it depends on the circumstances. But, employers need to manage the workplace properly. And, they should not place unreasonable demands on their employees in the current climate. 

Employers cannot take disciplinary action, or dismiss an employee if they reasonably  believe they are in “serious or imminent” danger, and consequently take appropriate action. In legal terms, the employee cannot suffer any detriment – which can be interpreted very widely. Bullying, harassment, missing promotion, being given unpleasant tasks, or being offered reduced pay are all detriments.

Some experts even argue that placing such an individual on furlough could, in some circumstances, be viewed as a detriment. In other words, the employee was being penalised 20% of their average earnings because the employer could not provide a safe enough environment for them to work in.

As we enter the next stage of the pandemic crisis, and employers start to look at how their business will evolve, redundancies and dismissals may well follow. It is important that employers protect themselves from the risk of further litigation, especially in an era of claims management companies might be prepared to take on some high-profile cases.

The risk is particularly high in many health and safety cases, as there could be unlimited damages, with no qualifying service criteria.  Remember also, it is not just employers that can dismiss, employees can claim constructive dismissal, or make whistleblowing claims if employers fail to deal with health and safety issues.

Not only could there be substantial damages and awards in such cases, if employers have behaved inappropriately, then in many cases automatic unfair dismissal may well be the verdict.

It may not just be the traditional ‘skivers and trouble-makers’ who appear to be a problem. There are a lot of very worried people at the moment, so be respectful of their concerns, and avoid treating them as a nuisance to be ‘dealt with’.

It is, therefore, imperative that employers, as they start to welcome workers back, do the following:

  • Do a full COVID-19 risk assessment of the workplace, taking into account the Government’s guidance for social distancing and safe working.  This should include consideration of the following (this is not an exhaustive list):
    • The method of travel to work, especially if it involves public transport or shared driving;
    • Site access and egress points – including avoiding congestion peaks, having 2 metre marking on the floor/ground, hand washing stations, dealing with delivery drivers;
    • Hand washing – additional facilities and supplies of hand wash, allowing extra breaks to wash hands;
    • Toilet facilities – restriction of numbers at any one-time, extra signs, enhance cleaning regimes to at least several times a day;
    • Canteen and rest areas – stagger break times, all surfaces regularly cleaned, 2 metre distancing;
    • Meetings – minimise the numbers to an absolute minimum, keep 2 metres apart, have good ventilation (open windows), or if feasible, hold short meetings standing outside;
    • Cleaning – enhanced procedures, especially in communal areas and at shared touch points, from photocopiers and telephones/keyboards through to machinery, tools and equipment, rubbish should be emptied regularly throughout and at the end of each day, all areas used for eating must be thoroughly cleaned at the end of each break and shift, including chairs, tables, doors, vending machines etc; 
  • Remember, that the hierarchy of risk control measures are in the following order:
    • Eliminate – people with symptoms of Coronavirus should not come to work;
    • Reduce – social distancing rules, washing hands before and after using shared equipment, regularly clean common touchpoints such as doors, handles, buttons, tools, equipment, stop/minimise hot desking;
    • Isolate – keep groups of workers that have to work closely together in the same teams, and in as small a number as possible, away from other workers;
    • Control – carefully supervise these new restrictions, keep face to face working to smaller time frames;
    • PPE – providing 2 metre social distancing guidelines are met, Respiratory Personal Equipment (RPE) such as face masks, are unlikely to be required, unless an employee has good reason to wear it, or, you are working in high infection risk areas such as social or health care, reusable PPE should be thoroughly cleaned and not shared;
    • Behaviours – measures necessary to minimise the spread of infection by 2-way communication over the importance of people taking responsibility for their actions and behaviours, and, encouraging people to raise concerns so that they can be addressed;             
  • That they consult fully with the workforce, and explain exactly how they intend to make the workplace safer through additional control measures;
  • Ensure that all workers understand they need to comply with the rules, and to respect others concerns in the current climate;
  • Continue to review and adapt their working practices as employees return to work;
  • Document carefully, and act on workers reasonable concerns about the workplace;

The Health and Safety Executive are already monitoring social distancing at work, even if they are not doing many visits. They are likely to be adopting an ‘intelligence based’ approach, so be careful not to give anxious employees an excuse to give them a call.

Our Consultants would be pleased to advise you on any element of the issues arising from this newsletter.

A reminder today that the normal rules of employment continue, even in the current crisis.  Although this had nothing to do with the coronavirus pandemic, an award against Paradigm Precision is important, primarily because the award is so large, £175,000.

The company makes gas turbine components for the aerospace industry, and are based in Burnley. One of their engineers took the company to an Employment Tribunal over the treatment he received after he had revealed to colleagues that he was gay. He had joined the company in 2012, and was on course to be a General Manager. In 2018, he spoke to several people in the company, including the HR Director, as he and his husband were looking to adopt.

He is quoted in Pink News “I confided that we had started to look into adoption. That’s when everything changed. They felt they couldn’t have a General Manager when I was going to be off for 12 months with parental leave”.

Mr Allen claimed that he had suffered harassment because he was gay; that he had been discriminated against and victimised. In addition, he had suffered detrimental treatment seeking to take adoption leave, and in the end, had been unfairly, constructively dismissed. Once his personal situation had been revealed, he faced bullying, homophobic comments and received offensive emails. The judgement listed a number of harassment issues relating to his sexual orientation, as well as finding the company guilty of direct sexual orientation discrimination, of victimisation and of unfair dismissal.

The total award was just over £138,500, but was grossed up by £36,000 to take into account the tax he would have to pay.

Peter Stanway, our BackupHR™ legal expert comments:

We are sure that most employers recognise that discrimination, harassment and treatment of this sort is illegal under employment law. But what they may need reminding is that, discrimination awards are not limited by the normal constraints placed on Employment Tribunals, and are, in theory, unlimited. A claim was also made against a named individual, presumably a Director, but was held to be out of time.

£175,000 is a sizable bill, especially in today’s tough market, and the judgment contains an appendix pointing out that if it is not paid in time, interest at 8% accrues.  It can also be very damaging for the reputation of the company and overall staff morale, especially if some employees want to come out as gay, but feel they will be unfairly treated for doing so.

Actions

  • Ensure that your Equal Opportunities and Dignity at Work Policies are not just sitting on a shelf/hard drive, but are widely understood by everyone in the business, through training and promoting an inclusive culture, set by Senior Management.
  • Taking action against potential adopters is just as bad/dangerous as action against women who are pregnant, or on maternity leave.
  • Deal strongly with harassment, whether it be gestures, pictures, emails or whatever.
  • Victimising people because they complain in good faith about homophobic behaviour is just reckless.
  • There are no service restrictions on discrimination claims made by people for any one of the nine protected characteristics, so do not be lulled by a false sense of security.

The guidance provided in this article is just that – guidance. Before taking any action make sure that you know what you are doing, or call us for a free initial chat on 01480 677980.

The coronavirus pandemic is presenting us all with a number of challenges.

And one of the serious challenges confronting employers is their duty to protect their workforce. Both those at home and, if they are still working, in the workplace be it care homes, manufacturing or outdoors.

Employers have a well-established primary duty towards their workforce under health and safety law. They need to take all practical measures to reduce their employees’ exposure to risks that endanger not only their health, but their safety and welfare. This is not just about physical well-being, but mental as well.

Assessing the risk

They also have a duty to assess ongoing and new risks arising from their operational activities. Once a risk has been identified, it must be assessed to ensure the employer has identified, where practically possible, any potentially harmful risks. They then need to set out measures to mitigate or eliminate such threats.

The problem is that with the coronavirus, it is inescapable that the more an individual comes into contact with others, the more they are exposed to infection.  Some organisations will already have well understood infection control policies in place, but for most this requires new ways of thinking, adapting and operating.

Employers have to balance all of these risks with the Government’s desire to keep business open, where practical, and for the organisation’s own ongoing viability.

The Government and other bodies have issued statements and guidance on this issue. In early April, the HSC, TUC and CBI, rather unusually, issued a joint statement about health and safety in the workplace. They warned that, however difficult the current circumstances, employers are expected to comply with Public Health Guidance, such as social distancing. Any that were deliberately flouting the rules and operating in an unsafe manner could expect action to be taken against them, including enforcement notices.

Asking the right questions

To ensure that they stay safe, there are a number of practical questions employers should be asking themselves. The answers to which may well mitigate risk and help show they are taking all reasonable steps to ensure the safety of their workforce.

●    How do you decide if it is safe for an employee to go to their normal workplace?

●    Do your staff understand the circumstances when they should not attend work, e.g. as part of infection control?

●    In the current climate, how easy and safe is it for individuals to get to work?

●    How safe is the exit and entry to the workplace and other pinch points?

●    Are wash and rest areas safe?

●    How do you protect necessary contractors and others that still need to come to site,  e.g. delivery drivers?

●    Can social distancing be maintained?

●    Do you have to change working arrangements to make them safer?

●    Is there sufficient hand washing facilities that can be safely accessed?

●    Is a deep cleaning regime necessary or desirable?

  • Do you need to step up workplace cleaning at the start, during, or at end of the day?
  • Who will do it, and do they have the right equipment and PPE to undertake it?

●    Is protection equipment necessary or desirable, and for what type of jobs?

●    Are there sufficient notices about hand washing, personal health, social distancing and how to identify the virus?

●    Do people understand how to work safely at home, and be able to regularly communicate with colleagues to reduce issues of isolation and anxiety?

●    Where workplaces have suddenly changed, due to a mass exodus to home working, have temporary self-assessment risk assessments happened?

●    Have you identified vulnerable individuals?

  • What actions have you taken to ensure their safety?
  • Do they need to self-isolate or shield and, if so, for how long?

●    How experienced are people at undertaking dynamic risk assessments where their working environment creates ever changing issues?

●    What do Government guidance and trade bodies advise us to do?

Your answers to these and other questions should guide and drive your actions.

There are useful Government guidelines on social distancing, specifying which businesses should be closed, along with a number of sector guides and general guidance on mental wellbeing.

Coronavirus is an extremely dangerous disease, as the number of deaths in the UK and the rest of the world demonstrates. But businesses are continuing to operate, and to operate safely.

Reasonable and effective health and safety measures are expected in any circumstances that an organisation faces. Employees are also expected to read, understand and where possible, make suggestions about their health and safety policy. And once agreed, are expected to follow  adapted measures and rules put in place to minimise infection. 

To ensure you continue to operate safely, your staff should be warned that failure to adequately follow the provisions of your health and safety policy, amended for the current environment, could result in disciplinary action.

A word of caution

Finally, however, we do need to sound a note of caution. While all employees are expected to follow your guidelines, if they raise concerns, your first instinct should not be to take action against them. Listen carefully to what they have to say. They may, after all, have some very legitimate points to make.

In addition, normal employment law still applies, even in difficult circumstances. Dismissing, disciplining or any other form of detriment to people for raising concerns can breach the Employment Rights Act, and be automatically unfair (regardless of length of service). It is also likely to be seen as taking action against a whistle-blower.

 

Our Consultants would be pleased to advise you on any element of the issues arising from this newsletter.

This publication is available at Guidance for the public on the mental health and wellbeing aspects of coronavirus (COVID-19) – updated 31st March 2020.  There has also been a lot of media coverage about the negative impact arising from COVID-19 additional to the worry about catching the virus.  Important factors such as social distancing, self isolating, loss of income, worry about job security, sudden remote working situations and alike are all having a toll on peoples’ mental health and wellbeing.  Hence why the Government has published guidance. 

We have redacted the full document for easier reference, and kept in some of the links. It is well worth accessing the original. You may wish to consider sending this round to employees.

What you need to know

It may be difficult but, by following guidance on social distancing, or staying at home, you are helping to protect yourself, your family, the NHS and your community.

During this time, you may be bored, frustrated or lonely. You may also feel low, worried, anxious, or be concerned about your health, or that of those close to you. Everyone reacts differently to events, and changes in the way that we think, feel and behave vary between different people, and over time. It’s important that you take care of your mind as well as your body, and to get further support if you need it.

What can help your mental health and wellbeing?

Consider how to connect with others: Maintaining relationships with people you trust is important for your mental wellbeing. Think about how you can stay in touch with friends and family via telephone, video calls or social media instead of meeting in person.

Help and support others: Think about how you could help those around you – it could make a big difference to them, and can make you feel better too. Could you message a friend or family member nearby? Are there community groups that you could join to support others locally?

Talk about your worries: It is quite common to feel worried, scared or helpless about the current situation. Remember that this is a difficult time for everyone, and sharing how you are feeling and the things you are doing to cope with family and friends, can help them too.

Look after your physical wellbeing: Your physical health has a big impact on how you are feeling emotionally and mentally. At times like these, it can be easy to fall into unhealthy patterns of behaviour, which in turn can make you feel worse. Try to eat healthy, well-balanced meals, drink enough water, exercise inside where possible and outside once a day.

If you are able to go outside, consider walking or gardening (keeping the recommended 2 metres from others as outlined in the social distancing guidance). If you are staying at home, you can find free easy 10-minute workouts from Public Health England, or other exercise videos to try at home on the NHS Fitness Studio.

Look after your sleep: Feeling anxious or worried can make it harder to get a good night’s sleep. Good-quality sleep makes a big difference to how you feel mentally and physically, so it’s important to get enough. Try to maintain regular sleeping patterns, and keep good sleep hygiene practices – like avoiding screens before bed, cutting back on caffeine, and creating a restful environment.

Try to manage difficult feelings: Many people find the news about COVID-19 concerning. However, some people may experience such intense anxiety that it becomes a problem. Try to focus on the things you can control, including where you get information from, and actions to make yourself feel better prepared. It is okay to acknowledge some things that are outside of your control right now, but constant repetitive thoughts about the situation which lead you to feel anxious or overwhelmed are not helpful.

Manage your media and information intake: 24-hour news and constant social media updates can make you more worried. If it is affecting you, try to limit the time you spend watching, reading, or listening to media coverage of the outbreak.

Get the facts: Gather high-quality information that will help you to accurately determine your own, or other people’s risk of contracting COVID-19, so that you can take reasonable precautions. Think about how possibly inaccurate information could affect others too. Try not to share information without fact-checking against credible sources.

Think about your new daily routine: Life is changing for us all for a while. Think about how you can adapt and create positive new routines – try to engage in useful activities (such as cleaning, cooking or exercise), or meaningful activities (such as reading or calling a friend). You might find it helpful to write a plan for your day, or your week.

Do things you enjoy: When you are anxious, lonely or low you may do things that you usually enjoy less often, or not at all. Focusing on your favourite hobby, learning something new, or simply taking time to relax indoors should give you some relief from anxious thoughts and feelings, and can boost your mood. There are lots of free tutorials and courses online, and people are coming up with innovative online solutions like online pub quizzes and streamed live music concerts.

Set goals: Setting goals and achieving them gives a sense of control and purpose – think about things you want or need to do that you can still do at home. It could be watching a film, reading a book or learning something online.

Keep your mind active: Read, write, play games, do crossword puzzles, sudokus, jigsaws or drawing and painting. Find something that works for you.

Take time to relax and focus on the present: This can help with difficult emotions, worries about the future, and can improve wellbeing. Relaxation techniques can also help some people to deal with feelings of anxiety.

If you can, once a day, get outside or bring nature in: Spending time in green spaces can benefit both your mental and physical wellbeing. If you can’t get outside much, you can try to still get these positive effects by spending time with the windows open to let in fresh air, arranging space to sit and see a nice view (if possible), and get some natural sunlight.

Staying at home

Recent guidance is clear about the need for people to stay at home. If you are feeling anxious, it might help to think about potential challenges and make a plan for them.

Supplies: Think about how you can get any supplies you need – either from a neighbour, family friends or a delivery service so you don’t worry about running out.

If you care for other people: You may be worried about how to ensure care for those who rely on you – either your dependents at home, or others that you regularly visit. Let your local authority know if you provide care, or support someone you don’t live with.

If you are being treated or taking medication for existing conditions

Continue accessing treatment and support where possible: Let relevant services know that you are staying at home, and work out how to continue receiving support during this time.  Ask about having appointments by phone, text or online.

Keep taking your medication: You might be able to order repeat prescriptions by phone, or online using an app or website if your doctor’s surgery offers this.

●    Ask your pharmacy about getting your medication delivered, or think about who you could ask to collect it for you.

●    Continue to order your repeat prescriptions in your usual timeframe. There is no need to order for a longer duration, or larger quantities.

●    Your GP practice (or clinical team) may move your prescriptions to repeat dispensing arrangements, so you only have to contact your pharmacy to get a repeat of your medicine rather than your practice.

●    Be careful about buying medication online. You can contact NHS 111 in England if you’re worried about accessing medication.

Where to get further support

Managing physical symptoms that are triggered by stress and anxiety

It is quite common to experience short-lived physical symptoms when your mood is low or anxious; for example, faster, irregular or more noticeable heartbeat, feeling lightheaded and dizzy, headaches, chest pains or loss of appetite.

It can be difficult to know what is causing these symptoms, but often people who experience them due to stress, anxiety or low mood find that they get worse when they focus on them.

If you are experiencing stress, feelings of anxiety or low mood, you can use the NHS mental health and wellbeing advice website for self-assessment, audio guides and practical tools.

The Government website also provides further help for specific groups of people:-

            Additional advice for groups with specific mental health needs

            People with a learning disability

            Autistic people

            Older people

            People living with dementia

            Dealing with a mental health crisis or emergency

Our Consultants would be pleased to advise you on any element of the issues arising from this newsletter.

Important – do not forget

The on-going large-scale impact that Coronavirus is having on the economy, organisations, teams and individuals is the main employment crisis we are all having to deal with at present.  However, it is important not to forget that there are some substantial new statutory changes that are implemented from this week as well.  Here are the other changes that the Government has now confirmed additional to the already published new National Minimum Wage rates (including the National Living Wage), new Statutory Sick Pay and Statutory Family Friendly Pay rates.       

Statutory Figures

The annual increase in compensation limits has just been announced.  The limits apply to dismissals, including redundancies, occurring on or after 6th April 2020.

  • £538.00 – the maximum amount of a week’s pay for calculating statutory redundancy pay and the basic award; (up from £525.00);
  • £16,140 – the maximum statutory redundancy payment or basic award, i.e. 30 weeks (up from £15,750.00);
  • £88,519.00– the maximum compensatory award which can be made for unfair dismissal (up from £86,444.00), or one year’s gross pay whichever is the lower;

These increases mean that the maximum total unfair dismissal award is now £104,659.00; although uplifts can add a further 25%.

Employees may be entitled to receive guarantee payments for up to five days of lay off in any three-month period.  The maximum amount of such a Statutory Guarantee Payment will increase to £30.00 (from £29.00) for any one day. In the current climate, this may be more than just ‘interesting’ if your business is adversely impacted by the Coronavirus, and a loss of customers, parts etc.

The new rates take effect where the ‘appropriate date’ for the cause of action (such as the date of termination in an unfair dismissal claim) falls on or after 6th April 2020.

Contracts of Employment

From 1st April 2020, all employers must:

  • Provide written statements of terms (contracts) to all workers and employees on day one or before;
  • Provide more information than currently required, such as information about probationary periods, training requirements and benefits;
  • This means not just employees, but also people who work for you, who do not really fit the category of genuinely self- employed;

This entitlement should bring clarity for many workers regarding their contractual terms from the outset of the relationship.

We have always advocated supplying such documentation on day one (if not before), so you should implement this now.

Other Changes

Agency Workers

If you use employment agencies to provide workers on some basis other than just a finder’s fee or introduction fee, then the rules are changing in the following respects:

  • Agencies must provide a Key Information Document to agency workers with details of their terms and conditions;
  • The ‘Swedish Derogation’ is removed, so all agency workers will have to receive pay parity (with your staff) after 12 weeks work;
  • Agencies must provide statements to agency workers that the Swedish Derogation no longer applies to them;

The Swedish Derogation is/was a device to allow for less than pay parity if they ere actually employed by the agency on a contract which provided for pay even if the agency had no work for them.

Holiday Pay Calculations

The Government has announced that the default position for calculating average holiday pay will be the last 52 weeks rather than the last 12 weeks.   

This is for workers with no normal working hours, or whose pay varies with the amount of work done, or who work additional hours. It is supposed to produce a fairer calculation for those with irregular/seasonal hours.

Assuming you have payroll software, it ought to be changed to calculate differently. We are not recommending that clients who pay on P60 earnings, or other long-term period, make any changes until the law becomes clearer.  For employees in their first year of employment, we would suggest you calculate this on their last 12 weeks/3 months earnings.

You are welcome to raise any concerns with our Consultants, who would be pleased to advise you on any element of the issues arising from this newsletter.

We may all be struggling to cope with the global pandemic, but normal business continues.

In the Government’s own words:- “From 1st January 2021, free movement will end and the UK will introduce a points-based immigration system. The new system will treat EU and non-EU citizens equally, and transform the way in which all migrants come to the UK to work.”

In line with its promise to be ready for our exit from the European Union, the Government has issued guidelines on its new immigration system. This is relatively simple to understand, even though we are certain it will create huge difficulties in interpretation once implementation starts.

The important highlights are:-

  • EU and non-EU citizens will be treated equally in future;
  • It will not apply to EU citizens already living in the UK by the end of 2020;
  • Such citizens will have until the end of June 2021 to apply for the right to stay under the EU Settlement Scheme;
  • Visas will be awarded to those who gain enough points under the new immigration system;
  • Points are assigned for specific skills, qualifications, salaries and shortage occupations;
  • New immigrants will generally have to score 70 points on a new points-based immigration system;
  • Employers need to apply to be a sponsor at least eight weeks before they employ an immigrant worker;
  • A new Visa application process will be put in place;
  • There will be other routes for those who graduate in the UK, highly skilled workers and for talent shortages in time;

The cynic will say it is a good time to introduce controversial legislation. Others will point out to the fact that whatever is happening with coronavirus, we must get on with the new system.

The system is designed to make it easier for skilled workers from around the world to come to the UK through an employer-led system.

EU citizens already living in the UK

The new system does not apply to EU citizens living in the UK by 31st December 2020.  They, and their family members, are eligible to apply to the EU Settlement Scheme, and have until 30th June 2021 to make an application.

Importantly, up until 30th June 2021, employers can continue to accept the passports and national identity cards of EU citizens as evidence of their right to work.

Skilled workers

From 1st January 2021, anyone new coming to the UK to work will need to demonstrate that:

  • They have a job offer from a Home Office approved sponsor;
  • The job offer is at the required skill level – RQF 3 or above (A Level and equivalent);
  • They speak English;

In addition to this:

  • They can generally only make an application if they will be earning more than the required minimum salary threshold of £25,600;
  • They can still apply if they are earning at least £20,480;
    • If the job offer is in a recognised job shortage occupation; or
    • They have a PhD relevant to the job;

So, some applicants will be able to trade characteristics, such as their qualifications, against a lower salary.

A total of 70 points is needed to be able to apply to work in the UK.

Highly skilled workers

From January 2021, the current Global Talent route will open to EU citizens on the same basis as non-EU citizens. This means the most highly skilled, who can achieve the required level of points, will be able to enter the UK without a job offer if they are endorsed by the relevant competent body.

Lower skilled workers

There will not be an immigration route specifically for those who do not meet the skills or salary threshold for the skilled worker route.

The UK says that it has set up arrangements with eight countries and territories to enable around 20,000 young people to come to the UK each year.

Other routes

Initiatives are also being brought forward for scientists, graduates and NHS workers, which will provide businesses with additional flexibility.

A new Graduate Immigration Route will be available to international students who have completed a degree in the UK from summer 2021. This will enable international students to remain in the UK, and work at any skill level for two years after they have completed their studies.

Employers – becoming an approved sponsor

Employers not currently approved by the Home Office to be a sponsor should consider applying as soon as possible if they think they will want to sponsor skilled migrants, including from the EU, from early 2021.

Visit ‘UK visa sponsorship for employers’ on GOV.UK.

To save you time, you will not get a licence if you have certain unspent criminal convictions. The ones they are most interested in are, not unnaturally, for immigration offences, and offences like fraud or money laundering.

There are two levels of sponsorship, employers can apply for one or both, depending on the types of worker you want to sponsor:

  • Tier 2 – skilled workers with long-term job offers;
  • Tier 5 – skilled temporary workers;

You need to appoint people within your business to manage the sponsorship process when you apply for a licence, as you will be audited regularly, and your sponsorship can be suspended if your paperwork is not in good order.

Costs

These vary for charities and small employers (less than 50 employees or £10.2m turnover) and all larger employers:

                                        Charities and Small Employers                 Larger Employers

Tier 2                                                  £536                                                   £1,476

Tier 5                                                  £536                                                   £536

Tier 2 and Tier 5                               £536                                                   £1,476

The visa process

New immigration routes, such as the skilled worker route, will be open from autumn 2020 for applications from those who wish to work in the UK from 1st January 2021. Applicants will apply and pay for their visa online.

NB – Anyone who comes to the UK as a visitor will not be able to apply for a visa to work once in the country.

EU citizens and non-visa nationals will not require a visa to enter the country when visiting, but all migrants looking to enter the UK to work must apply for permission in advance.

Most EU citizens will complete their application online.

Non-EU citizens will continue to go to Visa Application Centres (VACs) to enrol their biometrics.

Crossing the UK border

Citizens of certain countries can continue to use biometric passports to enter through e-gates. Those countries are currently Australia, Canada, Japan, New Zealand, Singapore, South Korea and the USA.

Similarly, EU citizens will continue to use e-gates, but rather pointedly this policy will be kept under review.

Others will need to see a Border Force officer.

Living in the UK

EU citizens can use the online checking service to demonstrate their immigration status and their right to work in the UK. Until 30th June 2021, employers, landlords and public service providers will continue to accept their passports and national identity cards of EU citizens as evidence of permission.

Non-EU citizens will continue to use their physical documentation.

Leaving the UK

Leaving the UK after leave has expired, or not leaving at all when required to, will impact a migrant’s immigration status and affect future interactions with UK immigration.

For more information on the points-based immigration system and to sign up for email alerts, visit GOV.UK.

The guidance provided in this article is just that – guidance. Before taking any action make sure that you know what you are doing, or call us for specific advice.

As announced in the 2018 Budget, the public sector off-payroll working rules will be extended to the private sector from 6 April 2020. The rules will only apply to large and medium-sized businesses.

Government authorities have been engaged in a crack-down on what they view as the ‘mislabelling’ of employees as contractors. The Treasury has long held the view that a number of people claiming to be self-employed and operating through personal service companies (PSCs) are actually employees who should be paying tax accordingly. 

A short introduction to IR35

Many self-employed contractors use personal service companies (PSCs) to supply their services to their clients. This is a way of saving tax and NICs, which is why HMRC introduced IR35 as a way of combatting the risk that PSCs and other intermediaries posed to the tax base. In essence, this asks whether, but for the interposing PSC, the individual would have been regarded as an employee of the client organisation engaging them. This involves considering the nature of the work performed under the contract, and the terms under which it is performed, and is known as “deemed employment”. If the answer to this is yes, then the PSC has to account to HMRC for income tax and NICs on the payments received from the client.

At present, the tax liability rests with the PSC. The change will be accompanied by obligations on the client organisation to determine the correct position for each engagement, and notify any other parties involved regarding “deemed employment” or genuine self-employment status.

It pays to be prepared for this reform.  When similar changes were introduced in the public sector two years ago, many organisations were caught out, or attempted to impose “global” determinations, which were then challenged by their contractors.

Whilst the focus is on the private sector, the rules are also aimed at charities. Many charities will be small, so may well be exempt.

Four key questions the Client must ask itself in respect of each contractor:

  1. Will the off-pay roll rules apply at all? The rules do not affect contractors supplied by an employment agency or umbrella company, where they directly employ them and operate tax and NICs on earnings they pay them, or staff supplied though a managed service company that deducts PAYE on ‘pay’.
  2. Where the rules do apply in principle, is the contractor using an intermediary which meets the relevant conditions for the new rules to apply? An “intermediary” would be a company (i.e. commonly known as a Personal Service Company – PSC) in which the contractor has a material interest (i.e. holds more than 5% of shares), but could include certain partnerships which the contractor is a member or even an individual.
  3. If the contractor is using a relevant intermediary (e.g. a PSC), is there a “deemed employment”? This will be for the client organisation to determine and to inform the relevant parties as mentioned above.
  4. Where there is a deemed employment, who pays the PSC? In a chain of intermediaries between the client and the contractor’s intermediary (or PSC), it is the lowest UK based intermediary in the chain (that is, the one that pays the PSC) that must operate PAYE.

The problem with these new rules is that they have encouraged some organisations who hire contractors, to apply blanket decisions on whether certain contracts fall within IR35. Blanket solutions are not appropriate.

Practical Implications of the off-payroll working rules

  • Determining deemed employment is not always clear cut, and it is often necessary to seek legal advice. Although there is no obligation to use the Government’s new online tool (the CEST) for this purpose, the advantage of doing so is that HMRC will be bound by the output of the service, unless it has been obtained fraudulently. The HMRC have introduced a new tool as the previous one was subject to major criticisms that it asked the wrong questions, and seemed ‘rigged’ to produce ‘guidance’ that the individual PSC should be paying income tax. It is better but still not conclusive in three respects :-
    • It regularly produces an ‘inconclusive result’.
    • CEST currently seeks to produce an answer out of a few questions on what can be a very complex and nuanced indicators.
    • The HMRC still reserve the right to challenge the ‘decision’ if they believe that it was not answered honestly/accurately.
  • Informing the Agency/PSC about the determination of deemed employment. Having determined employment status, the client must inform both the PSC/contractor and, if applicable, the Agency which pays the PSC, of the outcome of the review and, if requested, provide a written response as to how the conclusion on employment status was reached. The client needs a clear process to comply with this information requirement.
  • Extra costs. A key consequence of the new rules is that the client is responsible for an additional cost of 13.8% employer NICs and, if applicable, 0.5% apprenticeship levy on top of the payment. Broadly, the levy is 0.5% of pay bills over £3 million in the relevant tax year. The client is not entitled to deduct these costs from the fee payable to the PSC. The contractor, on the other hand, is likely to be in a better position (although this depends on the circumstances) as the PSC no longer has to account for PAYE and NICs on the fee received from the Agency. For a contractor who formerly considered themselves to be self-employed and that IR35 did not apply, deduction of payroll taxes will result in a significant reduction in profit for the PSC that would otherwise have been available to draw as dividends.
  • Pressure to re-negotiate contracts between the Client and the PSC – due to these extra costs, it is likely that the client will wish to re-consider the contractual terms :-
    • Where possible the client may wish to re-negotiate its fee with the PSC/contractor to take account of the transfer of NIC liability to the client.
    • The client may consider getting the contractor to abandon their PSC and supply their services instead through an umbrella company, or on a fixed term employment contract.

The Consequences for the Client of getting it wrong

Even where the client is not the fee payer (and therefore not normally liable to account for PAYE and NICs of the relevant contractor), liability could apply in certain circumstances, including if the client organisation :–

  • fails to notify its decision about deemed employment to the contractor/PSC or Agency with whom it has a contract to provide the services, within the timescale;
  • fails to reply to the written request from the contractor/PSC or Agency for the reasons for the decision within 31 days of receiving it; or
  • fails to use reasonable care in providing its view about employment status;

What Next?

Private sector companies and charities should familiarise themselves with the rules and start thinking about how they will apply to them. In particular, companies should:

  • Conduct an audit of contractors used in their organisation. It is likely you will need to make individual decisions, and have different communications with each PSC. The audit will be a factual investigation, looking at what each individual does in practice; how they do it; what contracts they are engaged under; how they are paid etc. This may also be a good time to audit any off-payroll labour that is not provided through PSCs.  Questions to be asked include:
  • What would the workers’ employment status be?
  • Who will be responsible for accounting for PAYE/NICs?
  • Who should bear the cost of any employers’ NICs? 
  • What contractual protection is available in cases of non-compliance?
  • Should we consider bringing the worker on-payroll?
  • Liaise with agencies and specialist service providers to determine which contractors may potentially be caught by the new rules.
  • Assess who will likely be primarily responsible for PAYE; then estimate any likely cost increases due to employer NICs and Apprenticeship Levy charges, and any potential changes in contractor charges.
  • If liability lies with the engaging business, calculate, report and pay income tax and NI contributions or consider alternative ways of engaging them.
  • The audit is likely to have knock-on consequences that may require legal advice. As well as determining employment status, you may need specialist tax advice to amend or draft contractual documentation.
  • Review existing policies for engaging the different types of contractors – these may vary between business functions.
  • Put in place comprehensive, joined-up processes to ensure consistent decisions are made and communicated in relation to the employment status of workers engaged through intermediaries, and to allow for such determinations to be challenged.
  • Review internal systems, such as payroll software, HR and on-boarding policies to see where changes are required.

Issues

Client organisations will be required to address status determination disagreements.  The Government recognises that, in some circumstances, an off-payroll worker may disagree with a client’s status determination.  The Government proposes that clients should develop and implement their own processes to resolve disagreements based on a set of requirements set out in the legislation.  As a minimum, the Government would expect any process to include the consideration of evidence put forward by the off-payroll worker and/or client, and advising the party of the outcome of that consideration and the reasons for that outcome.

No change for “Small” Organisations

Only medium and large organisations will be subject to the 2020 rules, so will not need to determine the status of the off-payroll workers they engage. The definition of “small” has been widely awaited, and the Government have confirmed that it intends to use the existing Companies Act 2006 definition. That is where the business satisfies 2 or more of the following features:

  • Annual turnover of £10.2 million or less;
  • Balance Sheet total of £5.1 million or less;
  • 50 employees or less;

“Small” organisations will be outside of the new obligations and services supplied to such client organisations will continue to be dealt with under the current IR35 rules with the worker and his or her personal service company effectively self-assessing whether the rules apply to that particular engagement. It is also worth noting that the IR35 rules do not apply to sole traders.

Conclusion

We recommend that organisations, if they have not already done so, thoroughly prepare for the introduction of the revised IR35 rules on 6 April 2020.

Clients should raise any concerns with their Accountants/Financial Advisors regarding any element of the issues arising from this newsletter. We provide a link here to our Control Test, which is solely focused on the employment not tax status of individuals acting as contractors.