Staffing considerations in the event of a local lockdown

Leicester became the first city in the UK to undergo a local lockdown on 29 June following a spike in the incidence of COVID-19 cases. This required non-essential shops in Leicester to close and pubs and restaurants to remain closed until 3 August, with close contact services such as nail bars and salons and outdoor pools and theatres permitted to reopen on 19 August. The requirement for those who are extremely clinically vulnerable to shield, which had been paused in the rest of England, continued in Leicester.

Local restrictions were also introduced thereafter in Greater Manchester, East Lancashire, Preston, and West Yorkshire. The Government has published guidance on the restrictions in place in these areas:  In Scotland, restrictions were introduced in Aberdeen, with closures of hospitality businesses, following an outbreak of coronavirus linked to bars in Aberdeen. 

To date, people have been permitted to travel to work both within and from outside the affected areas during local lockdowns where their workplace remains open.  The Treasury has confirmed in respect of local lockdowns that businesses who have already furloughed staff can continue doing so during this period where necessary.  This may be necessary where the workplace is closed or can only carry out certain activities and is therefore operating at reduced capacity (e.g. restaurants that are restricted to operating as a take away service).

The introduction of local lockdowns in areas where infection levels are high remain the Health Secretary’s favoured approach to controlling the virus.  As the UK lockdown eases, emergency local lockdowns are likely to become more common and could impact whole regions or particular cities, or individual workplaces that experience an outbreak.   Furthermore, local authorities in England have been given new legal powers to close certain business premises or prohibit certain activities in order to reduce the spread of coronavirus. FSB Wales has called for the creation of Rapid Reaction Business Fund to support smaller businesses in the event of local lockdowns

Are staff entitled to be paid if the workplace is required to close? 

Employees who are on fixed hour contracts are generally entitled to be paid where their workplace closes. However, where the contract of employment contains a ‘lay off’ clause, providing the right for employers to temporarily lay off staff without pay, employees would not be entitled to pay during the workplace shutdown where those clauses are invoked (with the exception of a small ‘guarantee payment’ for those with at least one month’s service). Contractual lay-off provisions are subject to the implied term of trust and confidence, which means that employers should briefly consult with employees first and give reasonable notice of any lay off where possible to avoid being in breach of contract.

As an alternative, employers may place employees back on furlough during a temporary period of closure, but there is no legal requirement to do so.  Although the employer is legally entitled to impose a period of temporary lay-off without pay where the contract of employment provides for this, doing so may have a detrimental effect on morale. Employers should therefore give careful consideration to placing employees on furlough where employees are eligible for the CJRS in the first instance, or alternatively permitting employees to take annual leave to cover a period of absence.

Casual/zero hours workers, for whom there is generally no guarantee of work, are only entitled to be paid for the hours they work, so would not be entitled to pay under their contract in this scenario, unless the worker was eligible for furlough under the CJRS and the employer agreed to refurlough them.

For new starters, employers may want to include a ‘lay off’ clause in their contract so that they can lay them off for a short period without pay in the event of a temporary workplace closure. Alternatively, employers may permit them to use their annual leave entitlement to cover the temporary closure period, so the employee gets paid their normal pay. Employers will generally need their employees’ consent to introduce new contractual provisions for existing staff, such as lay off clauses and consent to detrimental changes is likely to be difficult to secure. 

What about if local schools or childcare providers are required to close?

Whilst this has not been imposed in any local lockdown to date, if schools and nurseries are required to close, or if a school is closed to an outbreak in an individual school, staff with children may be unable to attend work due to a lack of alternative childcare provision, even if the workplace remains open. Where an employee can’t work due to a lack of childcare or school closures, they will not be entitled to pay (unless the employer’s policy provides for this), but they do have a right to a reasonable amount of unpaid emergency time off for dependants, which may create staffing issues for employers. Alternatively, employers may agree to place those employees who cannot attend work back on furlough, provided they have previously been furloughed (although there is no legal obligation to do so), or permit them to take the time off as annual leave.

Placing staff on furlough

Since July, there has no longer been a requirement to keep staff on furlough for a minimum of 21 days, so staff can be placed on furlough (where they agree to this) under the Coronavirus Job Retention Scheme (CJRS) for any amount of time. 

However, only employees who have previously been furloughed under the CJRS for a 3 week period at any point prior to July can be placed back on furlough, as the scheme closed to new entrants in July (with some limited exceptions, such as those returning from parental leave). This means that, where employers have taken on new staff since July, or have staff that they have not previously furloughed under the CJRS, they will not be able to use the furlough scheme for those employees in the event of a local lockdown.

Employers have been required to contribute to employees’ wages under the CJRS since August.  From September, the CJRS will pay 70% of employees’ usual wages for the hours furloughed employees do not work up to a cap of £2,187.50 per month in proportion to the hours not worked, with employers required to top up furloughed wages to 80% of usual wages for periods of furlough.  The CJRS will close altogether at the end of October.  Please see our factsheet on Furlough and the Coronavirus Job Retention Scheme on the FSB Legal hub for further guidance.   

Statutory Sick Pay

Employees who contract coronavirus, or develop coronavirus symptoms, or who are required to self-isolate as a result of contact with someone who displays symptoms, including where they are advised to do so by NHS test and trace, will be entitled to Statutory Sick Pay (SSP) where they meet the eligibility criteria for SSP. Employers may offer contractual sick pay at a higher rate of pay than SSP.

Employees would not be entitled to SSP solely because their workplace is required to close to help prevent the spread of coronavirus, unless they are required to self-isolate due to coronavirus.

The advice for extremely clinically vulnerable people to shield has been paused in the UK and generally no longer applies. However, individuals who are clinically extremely vulnerable and live in an area where additional public health measures require them to resume shielding will also be entitled to SSP in that case due to the requirement to shield if they cannot work for that reason, or cannot reasonably work from home, or if they cannot be relocated to work outside the local lockdown area (where employers have multiple sites).  Employers may ask for a copy of the shielding letter as proof that the employee cannot work due to shielding. 

Employers that meet the eligibility requirement for reclaiming any SSP paid to their employees due to coronavirus (i.e. employers that had fewer than 250 employees on 28 February 2020 and had a PAYE payroll scheme that was created and started on or before 28 February 2020) may reclaim up to 14 days’ SSP paid per employee for periods of sickness absence due to coronavirus i.e. a capped amount of £191.70 per employee.  Please refer to our factsheet on Sick Pay on the FSB Legal Hub. 

Communication with staff

It’s important to build confidence for those still working during a period of local lockdown that it is safe to do so, as long as social distancing and health and safety measures are followed.  Employers should remind employees of the ‘covid-secure’ measures they have put in place. Where infection levels are relatively high, some employees, especially those in the clinically vulnerable category, or those that were previously required to shield, may feel anxious about travelling to and attending the workplace, so reassurance should be given around health and safety measures that have been put in place for their and other’s protection.  Please refer to our template ‘Letter to Employees setting out Coronavirus Control Measures in the Workplace’ on the FSB Legal Hub.  

Looking ahead

We are still some way off from eliminating the virus, leading to the likely prospect of further local lockdowns. For this reason, as part of wider business contingency planning and resilience businesses should consider investing in facilitating home working on an ongoing basis where possible, as well as re-thinking working arrangements and considering upskilling staff so that they are multi-skilled and can provide temporary cover by taking on additional duties (within reason and where this complies with their contract of employment) to help cover short-term staff absences.