Coronavirus - Employment law update - Northern Ireland

• Northern Ireland
• Ireland

18-03-2020

Employment considerations in the midst of COVID-19 pandemic

We are living and working in unprecedented times. Employers in virtually all industries are considering drastic decisions they would not have dreamed of just a matter of days or weeks ago. And it seems that things will get worse before they start to get better. While businesses will hope for the best, it would be prudent to plan for the worst.

Most employers have already taken a number of pre-cautionary measures and steps over the last few weeks to prevent the spread of the virus. This has included repeating the guidance around hand washing and the ‘catch it, bin it, kill it’ practice, the provision of hand sanitiser materials and tissues, and the reduction of non-essential business travel.

On 16 March 2020 the Government announced its recommendations to limit the spread of the coronavirus or COVID-19 in the UK, including Northern Ireland.  Alongside all of the guidance and steps we have already become very accustomed to (around hand washing and coughing /sneezing) the key element of the next phase of the Government’s guidance is to try to limit social interaction and to focus on ‘social distancing’.

Social distancing measures are steps that can be taken to reduce the social interaction between people. This will help reduce the transmission of coronavirus (COVID-19).

The recommended actions issued by the Government are:

(i) Avoid contact with someone who is displaying symptoms of coronavirus (COVID-19). These symptoms include high temperature and/or new and continuous cough;

(ii) Avoid non-essential use of public transport, varying your travel times to avoid rush hour, when possible;

(iii) Work from home, where possible. Your employer should support you to do this;

(iv) Avoid large gatherings, and gatherings in smaller public spaces such as pubs, cinemas, restaurants, theatres, bars, clubs;

(v) Avoid gatherings with friends and family. Keep in touch using remote technology such as phone, internet, and social media; and

(vi) Use telephone or online services to contact your GP or other essential services.

Everyone should be trying to follow these measures as much as is pragmatic.

For those who are over 70, have an underlying health condition or are pregnant, the Government strongly advises such individuals to follow the above measures as much as they can, and to significantly limit face-to-face interaction with friends and family if possible.

Of course not all work or business can transition to remote / agile working.  It will therefore be important for every business to consider its core functions, the components of each part of the business and its requirements, and to identify whether or not there are ways in which social interaction may be limited and social distancing introduced, for example by staggering start and finish times, or by encouraging staff to bring their own lunches to avoid using the canteen at break times.  Lateral thinking around how best you can continue ‘business as usual’ in these unusual times in a safe manner for your employees, customers and visitors is critical now.

These unprecedented times will require communities to pull together and employers and employees to work in tandem to seek to find unique or novel ways of weathering the covid-19 storm together.  We have set out a few matters which may be considered in the circumstances – of course nothing is written in stone and there do not appear to be too many only right or wrong options in the current circumstances.

Deferring salary increases and bonuses, and taking pension holidays

• The timing of this health crisis coincides with the end of the financial year for many businesses, and in turn decisions on salary increases and bonuses. It is rare for employees in the UK to have a contractual right to pay increases, and most (though not all) bonus schemes are discretionary; for those that have business performance conditions attached, it may be possible to reduce them to zero or near zero.
• Deferring decisions until the storm has passed is an obvious means of reducing some immediate cost pressure – perhaps accompanied by assuring staff they will be “made whole” if you ride it out, to maintain goodwill.
• Where occupational pension schemes are in place, subject to relevant scheme rules and contractual terms it may be possible to negotiate pension holidays.

Seek volunteers for unpaid leave / lay-off, sabbaticals or reduced working week

• One of the most effective ways of achieving cost-cuts may be to ask staff to take some unpaid leave, or agree to work reduced hours for reduced pay.  Where it is apparent that the only alternative is potential job losses at a later stage, many employees may be prepared to assist.
• Are there any other ways in which you could increase the incentive for employees to reduce their hours or time off?. One innovative approach, for example, may be to offer to maintain employee pay at a certain level, conditional on individuals using the time freed-up to volunteer to perform essential services in the community - assisting vulnerable people, providing childcare for the children of healthcare workers, and so on.

Redundancies and changing terms and conditions

• The last resort may be to force through pay-cuts and other cost-saving measures by changing employees’ terms and/or implementing redundancies. (Many employers would offer voluntary redundancies first before going down the compulsory route.)
• General pay cuts will need employee consent which may be difficult to achieve, although if there is leadership from the top and particularly in smaller organisations this may be forthcoming, especially if employees are offered something in return such as future bonuses, benefits or even equity.
• Where compulsion is necessary, if 20 or more redundancies or forced changes to terms and conditions are proposed at one establishment within a period of 90 days or less, the employer is obliged to consult collectively beforehand for a minimum 30-day period with appropriate representatives of affected employees - trade unions, an existing employee body with an appropriate mandate, or a freshly elected employee body.  If any proposals impact 100 or more employees the consultation period is a minimum period of 45 days in Great Britain (90 days in Northern Ireland).
• Conducting a consultation process in the midst of the Covid-19 outbreak will require innovative thinking but there is no reason in principle why technology cannot be deployed to good effect, including virtual meetings through Skype or Zoom for example.
• The 30-day (or 45 or 90 day depending on numbers) period can be dispensed with where “special circumstances” apply. While the test of what constitutes a special circumstance is difficult to meet, the current situation may arguably fall within the special circumstances definition.  Of course we do not know whether or not the Tribunals would agree.
• Employees who have more than two years employment and who are made redundant will be entitled to notice, any untaken holiday, statutory redundancy pay and whatever enhanced redundancy pay the employer typically pays. If enhanced payments are made, it might be possible to include an obligation to repay if the employee is given an opportunity to be re-employed in the same role within a certain time period afterwards (in other words if the business will need staff again in a number of months’ time).

No employer wants to do any of these things, but some industries already find themselves in the position of having no other option.  Commentators believe that the UK is ten to 14 weeks away from a peak of Covid-19 cases and that the coronavirus crisis and implications of the crisis are likely to be with us for up to a year. This inevitably means that some tough decisions are going to need to be taken.

For support on legal issues facing your business in light of the outbreak of Covid-19, please visit our Coronavirus hub to get our latest information and guidance.

• Lisa Bryson
• Partner
• +971 4 389 7000
• +971 4 389 7000
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