Posted: 23rd October 2020
Business owners may be excused for being confused about what they are currently allowed to do when it comes to running their businesses and employing staff. Back in March 2020 it was a shock when the lockdown was imposed, but the rules were clear: all non-essential businesses must close their premises and staff should work at home if they could, with only frontline staff going out each day. We knew where we stood.
Marathon not a sprint
Initially we were given to believe that this would be for a short period and so temporary arrangements were put in place. The Coronavirus Job Retention Scheme (CJRS) was introduced to assist businesses cover the costs of furloughed staff, so this helped with some of the worry over finances for some owners. However, once it dawned that the situation was going on for was much longer than was originally envisaged, longer-term systems for managing staff working from home and keeping in contact with furloughed staff were established. Some sectors such as the hospitality and events were stopped in their tracks until the, “Eat out to Help out” scheme was put in place to help. And things seemed to be heading in the right direction.
The restrictions were relaxed over the summer to allow more households to mix and overnight stays away allowed. We all started adjusting to the “new normal.” Businesses were encouraged to bring staff back into the workplace for a short period, but that advice was soon reversed when the number of Coronaviruses cases started to pick up.
There are lots of theories as to the reasons for the increase, but certain areas are far more badly affected than others. Consequently, local restrictions were reintroduced in higher-risk areas. Then in October and the government announced it was going to introduce a range of tiers from 1 (medium) through 2 (high) to 3 (very high) with increasing restrictions including forcible closure of some business sectors completely in those places where the infection rate was highest.
The politics of the situation have interfered with the human hardships that are currently being faced by the population and clearly more regions will be put into the higher tiers before the infection rate subsides. Therefore, business owners cannot ignore the fact that they might end up in a higher tier than they are currently and it would be wise to plan accordingly.
Not surprisingly people are confused about what they can and cannot do, but the headache for business owners has worsened. If you run a business in one tier, but you provide services in another or have staff living in a higher level tier, what are you allowed to do with regards to staff interaction with other members of staff or customers? The guidance is vague at best. It seems to change on a frequent basis and therefore time-consuming to check that you are abiding by the latest version. Significantly, it is worrying that it does not appear to be widely known that both employers and employees can be subject to big fines if they get it wrong with regards to working and isolation instructions.
Most business owners have worked very hard to ensure that their businesses meet the Covid-Secure guidelines but are now stoically struggling to meet the added restrictions being placed on them. The furlough scheme is about to come to an end, with the JSS replacing it. But many owners are finding it difficult to work out the logic of the new scheme that seems to imply that it is cheaper to keep fewer full-time staff than lots of part-time staff, even if that means making some posts redundant. This appears to be an unintended consequence of the scheme. The Chancellor said that he wanted to protect viable jobs, but what may not be viable now if a business is forced to close, is not the same as one which will become viable again once the restrictions are ended. The JSS will not enable businesses to “hibernate” jobs in such a situation, nor will it allow businesses to provide any means of funding to help those employees scared to work because of health vulnerabilities if they cannot work from home, with the end of the shielding designation.
Support and Planning
Those businesses that are forced to close will be able to access the government’s Expanded JSS funding which will provide support to staff unable to work along similar lines to the previous furlough arrangements. However, because it will be paid in arrears, the businesses will have to have enough funds to pay staff first and that may cause cashflow issues for some. But those who simply decide that it is not viable to open at the moment due to a significant drop in trade will not be eligible for any additional support and it is those in particular who are likely to suffer most unless they are able to diversify to keep trading until things improve.
This means that businesses urgently need to review their business plans. They need to work out exactly what services and products they can offer, both now and in the longer-term, as well as a realistic assessment of the staffing levels required for all scenarios. Acting early rather than “fire-fighting” will give confidence to staff and customers that the business is viable and intends to survive the pandemic conditions as well as ensuring that there are sufficient funds available to keep trading.
Having sufficient cashflow is essential, so business owners will need to discuss their options with their accountants / financial advisers. They should also speak to a reputable HR Adviser for help and guidance to ensure that they consult properly with staff over changes that they may wish to make to employees’ contracts as well as how to deal with Covid-19 staffing issues. Remember, you cannot simply impose changes on staff – they must be agreed by them before any business can put staff on reduced hours, lay them off or pay wages at a reduced rate. And if audited by HMRC, you will be required to provide proof of the working arrangements agreed. So if you need help and assistance with this, please do not hesitate to get in touch.