As we settle into the business environment created by COVID-19, it is crucial that companies dedicate their efforts to business continuity. View this webinar to gain insight on practical next steps and receive valuable legal guidance.
Business Continuity in a Crisis:
Practical Steps & Legal Guidance
Important Note – Country-specific regulations continue to be updated as a result of the current circumstances. While all information mentioned in this webinar is current at the time of the recording (4/14/20), additional legislative changes may have subsequently emerged.
Business Continuity in a Crisis Transcription
Tallin: Hello, welcome to our webinar, Business Continuity in a Crisis: Practical Steps & Legal Guidance. My name is Tallin Johnson. I am the Marketing Manager at Global Upside and will be moderating the webinar. This session is being offered on-demand, meaning the webinar was recorded on a previous date. Before we jump into the content of the webinar, I did want to make you aware that this webinar session is a recording and we have enabled the Q&A function which will allow you to submit any questions that you do have as you view the session. Our team will monitor any questions that you do submit, and we will work to respond to any of those questions via email as soon as we are able to.
This webinar was recorded on April 14, and since that time, the UK government has announced some changes to the job retention scheme. Though this may or may not reflect upon anything that was directly discussed during the webinar session. Many of the topics discussed in the webinar are frequently being updated by the governments within the countries which were discussed. With that being said the topics discussed during the webinar were correct at the time of the recording but may have been updated or changed to, since that time. If you have any questions regarding any specific details discussed during the session, we do encourage you to reach out to us directly via email at email@example.com and we will be sure to get you in contact with the correct person.
It is now my pleasure to introduce our panelists to you. So first, I would like to introduce Ragu Bhargava. He is the co-founder and CEO at Global Upside. Ragu is an award-winning serial entrepreneur and CEO of Global Upside which is part of the Global Upside Corporation, a conglomerate of brands providing the most comprehensive range of PEO, human resources, accounting, payroll, and talent acquisition services in 150 plus countries. Our brand service an expansive customer base ranging from startups to the world’s largest enterprises. In his previous roles, Ragu was the CFO at ActivIdentity (ACTI) and held leadership positions in several companies, including Deloitte and NetIQ (NTIQ).
Next, it is my pleasure to introduce Rachael Oakley, who is the Associate of UK employment in the United States. Rachael is a UK employment lawyer based in Osborne Clarke’s San Francisco Bay Area offices. Osborne Clarke is an international, full-service law firm with offices across Europe and Asia with a simple goal – to help clients and their people succeed in tomorrow’s world, Rachael works closely with US and international companies providing in time-zone advice on UK employment law, HR and international expansion issues. She also works internationally with European and Asian employment, executive compensation and corporate immigration matters, and cross border projects. It is now my pleasure to turn the time over to Ragu and Rachael.
Ragu: Thank you, Tallin.
Before we dive into the material for today, let me just start off by saying – If there is disruption, there will also be recovery. Our actions now will directly influence the impact we make and the impact we experience long-term. Basically, what goes down will come up at some point.
With that, let’s move into the presentation for today. Welcome, everyone and today we are going to talk about business continuity and its impact on the people, the operations, and the workspace for a company. Whether it is a distributed organization, centralized organization, and obviously all businesses run on people, without people that are no businesses. However, because we are going to emphasize and cover a lot more about the people aspect of business continuity, I am going to pick up on operations and workspace first.
Let us dive into operations – So, operations, whether they are manufacturing or service, or retail, you have to have a continuity plan across all teams. Because in manufacturing operation obviously there lies a lot more on the factory workers. But so, does that same operation rely on the shipping department and the people in the back office that are approving the sales or the purchase orders and shipping documents and all that. So, we cannot de-emphasize the value of any one team or emphasize too much the value of any other team. However, to get the right emphasis across teams, senior management of the company or the business have to be very heavily involved in designing the continuity plans and execution of that. In fact, having daily or weekly calls, depending on the level of importance or the level of hurt may impact how much senior management needs to be involved.
Another point to keep in mind is – what are the critical functions and what will are the operational hubs, which means, for example, in the manufacturing environment, you may need to worry about which factories are more critical based on demand or lack thereof, versus which ones you might be able to shut down or slow down the production by reducing shifts and things like that. In-office environments, you may need to think about how teams need to come together and how they need to work together so that the functions that depend either on the team itself or across teams, cross-functional teams are able to communicate, coordinate and make sure things are happening.
This is a very internal focus on the first two items but focusing on your clients and our customers are equally important. You do need to keep your customers informed, clients informed about what is the disruption calls in, at your end, the impact of the disruption at your end and how would that impact your ability to deliver your products and services to the customers? Are you able to continue delivering them the way their needs are so that they can be met? Or do you have to delay shipments, possibly ship a different product because you may have those in stock, but you do not have the exact product in stock? Can you provide them different services in this time of broader need, where your customers are also facing being backed off the broader economy, and do you need to support your customers in a very different way? So, those are things that you want to be communicating and talking to your customers about.
As part of operations, obviously there are the worker bees, but there is also the managers and leadership. Is leadership impacted? Are people available and operating so that decision making is not slowed down, accountabilities are not slowed down and how will that leadership impact the short-term long-term operating plans? So, maybe we know that the shelter in place or lockdown is coming up in a week or three days. What do we need to do today to get our teams well situated and prepared for that sheltered place or lockdown in a future timeframe? Similarly, as the lockdown is getting lifted, how do we bring people back into the workforce, and some of this will cover in the workspace section, but you got to think about all of those things.
Now, remember you have your business continuity plans, people think about the team, the facilities, the hardware, and software requirements but they also need to think about the rest of the supply chain. For example, contractors may not be able to either come to work or be able to deliver what they need to deliver. If you have a vendor workforce, and actually rely on how is the current situation pulling back that? Will they be able to continue to deliver what you are looking for? You may have people on PEO services and if they are on PEO services, how does that impact and what is your ability? What is your flexibility in being able to support those employees, even though you are not directly employing them, they are still your responsibility. You still have to worry about furlough, you may still have to worry about workforce reduction, you may still have to worry about pay cuts, even though they might be on a temporary basis those are very important factors to consider at a broader level.
Communication – I do not think we can emphasize it ever enough that communication is the key to all success, but communicating, making sure they are crisp, well thought through and the frequency of that. So, in the early days, you may need to communicate a lot more because you want to bring people into the loop as to your research, the impact of the situation on your business, the impact of that situation on the broader economic environment, your relationship with your customers, and how it impacts your customers, what will be the impact of that on your business? So initially, we would recommend doing a little bit more communication but as things start to stabilize as people, as your business continuity plan is being implemented and working, people have a little bit more comfort and would need to worry a lot less. So maybe your briefings can be weekly instead of daily.
What is mission critical? Why is that important? Because having your workforce or planning the ability of your workforce to stay employed, to stay working is extremely important. But think about manufacturing cars, if people are not buying cars in the current environment, does it make sense to do that? Or can you retool your factory to manufacture something else that is much more importance for the moment, like ventilators. However, knowing that and also knowing if some of your workforce is not mission critical to support your customers or to support your operations, then maybe the team needs to focus on from a furlough or an extended leave perspective. This also helps you determine how you are going to deal with that. We cover some of those options in the people section later and Rachael to talk about it also. Now, the thing to worry about is that we are all used to working from the office centralized locations, or regional hubs and being able to get up from your desk, go to somebody else’s desk, and talk to them and try to solve an issue. Now, keep in mind that if everybody is under lockdown, we are all working from home, which means we do not have that ability to get up and go talk to people, which means we are doing a lot more emails. You may be using other tools to communicate, and how does that all impact the workforce, because by not communicating via email, and phishing becomes a bigger issue.
The CFO may get an email from the CEO on phishing but asking him to approve the wire and he is like, “Oh, I just talked to him recently”. I do not need to touch base and approvals to wire and this could be fraud. So those are the things that you have to worry about cyber-attacks and the systems, the physical security may be built around data security in a centralized location, but now you have each employee having a data point outside of their facilities. How do you address that? How do you make sure that there is still data security that some employee, a rogue employee is not downloading data and sharing it with competition or trading on it somehow?
Those are things that you have to worry about a lot – cashflow planning, contract cancellations, etc. Just like your business is impacted by an event, your customers businesses may or may not be impacted similarly. How are you going to survive if a customer is going to call and say, “Hey, I run out of money and I’m shutting down so the contract is cancelled”. You may have unpaid bills due that the customer is never going to pay. You may have a situation where the customer may need to ramp up some operations and how you are gonna support on that. Keeping in mind in all of these situations is working capital. So yes, you can extend some payment terms and yes, you can do certain things. But if you are in a professional service as a business, you have to worry about making payroll on a weekly monthly periodic basis. Do you have a plan? Do you have enough money in the bank – cash bank? Do you have enough cash to the bank to support this challenging environment, of drain or where you are having to pay your bills, but your customers may not be paying or not have the ability to pay for whatever reason. So those are some of the factors that you need to worry about from a cash flow purposes and then giving a clear direction to the team as to how to work through cash flow. This may be a little bit more focused on the accounting team or the treasury function, but then having clarity will help you manage through this challenging time.
Let us talk a little bit about workspace – So workspace obviously in a manufacturing environment is your factory; in a professional services type environment is your office; in a retail is your store and restaurants. Obviously, there are lots and lots of types of businesses. In the way you manage these different operations, different workspaces during a crisis like this varies. For example, restaurants obviously are allowing workers to come in so they can still stay open for business, but you cannot go in as a customer of the restaurant. You can just do take-out as an example. It is not just that you are able to manufacture but is your restaurant designed, is it geared, Do you need to do changes or make changes so that people are not coming into your restaurant, but you are still able to deliver them the food, the takeout, or the cup of coffee at a coffee shop, or at a retailer where retail counters being put with the Plexiglas separators so that you do not inadvertently impact influence the workforce by infecting them somehow.
So you have got to worry about all of these and also part of that is criticality of the nature. Clothing stores, a lot of those are shut down because obviously buying clothes is not essential. Because you have this interaction with your clients, your customers walking into the store or into your retail establishment, you have that opportunity, possibility of worksite contamination. Somebody infected or actually sick may walk in and cough, sneeze then somehow negatively impact your environment, which actually impact rest of your workforce. How do you prevent that from happening and not knowing because we may not have built an ability to test for everybody who is coming in if they are infected or not infected? How do you control? So, when I went to grocery shopping the other day, what they were doing is after every person checked out, they would wipe the conveyor belt clean so that any food left put on it, if there was any infection from the prior customer would not possibly impact me as another customer, or impact the workers at the facility. So sanitation is extremely important and how do you control the visitor? For example, all retail establishments that are open or controlling the number of people that are coming in and out, when there is a line outside, you have to stand six feet apart. Now, those rules can evolve and change depending on what the situation is, what is impacting.
Obviously in COVID-19, it is the 6 feet policy. OSHA actually has guidelines issued for workplace injuries, workplace impacts or people are getting sick and stuff. There are requirements not only documented but report and in the case of COVID-19 there is more paperwork that needs to be done, that needs to be filed with the government. I took a flight about 6-7 weeks ago and I had to fill out a couple of page of document that the airline then turned into the government. So if somehow somebody was infected on that flight, they would not be able to trace everybody on the passenger seat where they were, what they were going to do, where they were staying and stuff, and your destination, country or destination place, so that the government could track them and make sure that they are safe. Updated travel and meeting protocol, I just spoke about travel, but obviously, most travels at least international travel is all shut down. Lots of countries have shut down domestic travel, whether it be by plane, train or automobiles. So you have to think about no travel policies, or whether it is company mandated or government mandated and if there is no travel, then how do you meet and talk to people, whether it ‘is coworkers, your own team, internal team, working with clients or prospects, because business is not coming to a halt, it is just slowing down. You still need to do a lot of those activities that you did in good times but now you have limitations on your ability to meet and go visit people.
Think about at some point, this thing is going to end, people are going to start to come back to work and what are we as business managers responsible and what should we do both not to start rumors, as well as allay the fears of the employees, so they know that if they come to work, they are going to be safe. So these people, some of the employees may be in not so good health. not related to COVID, but just not in good health. They may have family members, children, elderly parents, they may not be in good health, and you need to provide them that comfort that if they come to work they are not going to get sick. Depending on your workforce, your workspace, where you are working, how you are working, that people are thinking of letting a smaller group at a time start to come in so that there is social distancing, initially at work, but teams are starting to come together. Maybe some companies are actually going to implement this thing at the door before you can come in – temperature measurement. In China, the government has implemented the QR code system that you have on your phone, which proves to somebody that can read the QR code that you are either infected or not, for example, the Walt Disney park in Shanghai, you have to scan the QR code to be able to get in. Again, attendance is seriously limited so that people are not going to run into each other as much.
Now let us talk about people and in a few minutes, I am going to hand it over to Rachael to cover the legal aspects of how to deal with people and the matters that come about because of the COVID or continuity issues. First of all, like I emphasized earlier about senior management being involved in all decision making in all planning and execution, well one at the top matters.
So this is week five, for global upside working from home, even though the state of California has only had that shelter in place for four weeks, we actually asked our teams globally to stay home and start working from home. Why is that important? Because I, as the CEO and we as the management of the company, care about the team. We do not want them to get sick or have unhealthy work conditions where they are being impacted by a co-worker. Do not underplay the situation. Obviously, 4-6 weeks ago, people in the US did not understand the gravity of the situation. We were doing what we were doing, but does not mean that you brush it aside by saying, oh, it does not matter we are not going to get impacted to that because you do not know the final answers. Being cautious versus being over optimistic. Social media policy – You will want your employees to air their concerns, to voice whatever they are feeling ,which results in if you have that Q&A, the dialogue going back and forth with the team, you understand how to lay out guidelines that are clear.
So you might say one thing, but if the team does not understand it, you may need to do a FAQ, you may need to give more detailed directions as to what does staying at home mean, on your company pages, on your social media updates. You can provide guidelines and depending on your workforce, their distribution so that everybody is aware of what the company is doing for the safety of the team.
Open and realistic communication – I cannot emphasize this enough because if you miss an organization, you may have issues come about because of infection and also, expectation management. If your employees know what to expect – they are required to work from home, they can come to work or not come to work. This allows them to coordinate their activities, not just with the internal team but also with outside parties like customers and clients, with vendors, so everybody understands how to operate in this limited environment. What does lockdown mean? Because the lockdowns, the shelter in place, were put in place in different states at different times, different counties at different times, different countries at different times. Are you allowing your team to travel to Mexico just because they have not put a lock down or are you allowing your Mexican employees to come to the US because you have not put a lock down? So you have to think about that, and you have to communicate that clearly.
If you are not in the healthcare business, you then do not necessarily understand the impact of a medical emergency like this. What you want to do is engage with health and safety experts, understand what you need to worry about at heart and prepare your team for alternate work arrangements – which could be work from home, which could be no work at all or something in between depending on what industry essential services those kind of things. Also, have clarity even if you are in an essential services business and in your team if is somebody is sick, they need to clearly understand when should they not come to work, when should they be staying home and what does that mean? What is it what is the financial consequences of them staying at home? Do they have to take sick time, do they work without pay or do they stay home without pay? To the extent they have clarity, they have comfort that they know what is going to result and they can plan for it. You can work with them to plan for them.
This condition can become a big issue where you want to make sure that you are not discriminating somebody because they are older or you are allowing people that are younger to come to work, because you think that the younger population is not going to get impacted. So maybe you are somehow looking at the your team economically. But you need to keep that in mind that anti-discrimination policies in these trying times are even more important to being properly implemented. If you are in the essential services business and people are not coming to work, you may have to consult a lawyer to get some advice on increase absenteeism or refusing to come to work? How will you handle that? How will you continue to support the requirements of the business?
In these times, if you are non-essential services provider then you may force or allow the team to take unpaid time off. The government of US in particular is implementing a sick leave or stay home policy with paid time that the government is subsidizing. Depending on what your industry is and in which country you are in, you may have options to work with your team to properly support them. Certain businesses are out of money, certain businesses will not be able to keep their doors open, so what do you do in case you have to do layoffs as the last recourse, and it sure you do it right. Make sure you can consult with lawyers and other HR experts, so you don’t have constructive dismissal. The end did not get richer. We will get a lot more into this about the employment guidelines and how they have to be enforced in that particular geography. What is a temporary layoff? What is a furlough? What is permanent layoff, severance entitlements? What does that do to you financially? What is it that you are required to pay? Is there any availability of resources, subsidies from the government to support them?
I started off by saying all business are concepts of people as one of the cornerstones. If you do not have people, and if you lay off too many of your people, when these things change, you may have a long term impact on that. So, keep in mind that todays workforce, even though they may seem like a burden, because you cannot afford to pay their salaries, cover their salaries are tomorrows asset and so treat it like an asset today, treat them properly. So that tomorrow when business starts to change and turn, and you have the team there, and it can actually work for you.
With that, let me turn it over to Rachael.
Rachael: Thank you Ragu, and hello, everyone. It is great to be able to speak to you today about some of the legal guidance that we are navigating through the difficult time. The first area we are going to cover is about working arrangement. As you all know, most European countries have now imposed some form of social distancing requirements and stay at home orders which essentially means that employees are needing to work from home wherever possible unless their work relates to key work sectors or their work absolutely cannot be done from home. This is likely to be in place for some time to come. Just yesterday, France announced that it will be continuing it’s lock down for another month until mid May, so this is not going away. This clue presents new challenges for businesses both where they still have workers in-situ and also where businesses are having to very quickly adapt to possibly 100% of their workforce working from home. Employers are also going to need to recognize the need for many employees to work flexibly during this time as they juggle other caring responsibilities with their work.
Essential office working considerations are going to be fairly self-explanatory, but it is going to be important to keep an eye on public health guidance and take all reasonable common sense precautions such as providing cleaning or disinfecting supplies, limiting unnecessary visitors to buildings and encouraging good personal hygiene. But some countries are being more specific than that, for example, in Italy, a daily clean and periodic sanitization of the company’s premises is actually mandatory at the moment. Why is this important? Well, it all comes down to the overarching legal responsibility on employers to ensure the health and safety of their employees with an affirmative obligation to maintain itself safe and healthy working environment for their employees, wherever that is, and mitigating or eliminating workplace hazards wherever possible. It would therefore be sensible, although not mandatory, for most employers could conduct a form of risk assessment to assess the risk in a particular working environment for both your employees who are still working in the office and those that are working from home. In doing so, pay particular attention to any more vulnerable workers, such as maybe pregnant employees or those with a known underlying health condition.
In such circumstances in most jurisdictions this will, like it does, in the US require reasonable adjustments to be made to any working condition or adjustments to employees working tools and equipment. As part of this exercise, do not forget an employee’s mental health which is arguably more at risk than ever in periods of isolation, and dragging the same kind of keep. Consider a way to keep in touch and engage with your employees all the time whilst they are not in the office. We are certainly seeing daily stand ups becoming the new coffee break and working from home also has its challenges in terms of ensuring security of company information and sensitive information when in a time of data privacy is so important. Not only is it important in terms of the employee data, particularly health data, but it is important to secure data security while employees are not in the office. Whilst most data privacy regulators throughout Europe will recognize that both financial and people resources will likely be diverted away from usual compliance procedures, their message at the moment and also the data protection law should not be a barrier to different types of working. In most circumstances, businesses will still be expected to consider the same kinds of security measures for homeworking, but they would in normal circumstances. It is therefore a sensible time to check your acceptable use policies, your bring your own device to work policies and other IT policies and remind staff about the precautions they should be taking wherever they are working. Even a reminder about things to look out for in spam emails is helpful as Ragu said some people may be looking to unfortunately take advantage of company systems being more vulnerable at this point.
Some businesses are also facing that tricky situation where an employee may be refusing to come into work when they need to. Typically an employee refusing to attend work with a valid reason can result in disciplinary action for misconduct. However, the situation is much more tricky when an employee because of the nature of the work is required to come into the premises and they are not ill so they can technically work but they do not want to because they are afraid of catching Coronavirus. What do you do then? Well, this could particularly be the case for those who are at higher risk of contracting the virus or those who have more vulnerable people living with them who need to shelter at home. Here the dilemma really is that the employer likely has a reasonable right to request that the employee comes into work, but the employee arguably has a reasonable reason for refusing to come into work. The advise here is to try and speak to your staff and listen to the concerns they have, take steps to protect them and remove those concerns where possible.
For example, if the issue turns out to be that they do not want to use public transport, do you have the option to be able to offer them extra car parking or another solution so that people can avoid using public transport that would allow them to come in. Are there other steps you can take? If an employee still does not want to come in are the other steps you can take. If an employee still does not want to come in, you might be able to arrange things like them being able to take holiday or unpaid leave. Ultimately, that one is not going to be a one size fits all and you might need to be creative and solutions proposed based upon the individual circumstances. Whilst disciplinary action may be a possible kind of last resort in these circumstances, that is going to be quite difficult and might result in employer relationship issues later down the line for you.
The next topic was to cover on the next slide is employee illness and sick leave. So most countries are advising self isolation for those who have traveled to particular locations or who are showing signs that indicate they may have COVID-19. Employers who are following government guidance in such circumstances, or where an employee is showing flu-like symptoms are going to be justified in requiring an employee to stay at home. When it comes to payment of such an employee, this is going to be dictated largely by whether the employee is able to continue to work from home or whether they cannot and therefore on sick leave. So it becomes a bit more tricky when an employee is self isolating because of someone else in their household or because of the nature of their work they cannot undertake this from home. In such circumstances, you will need to consider guidance in your local country to determine the best approach. For example, temporary changes to statutory sick pay have been introduced in the UK which would mean that SSP is due to employees if they need to self isolate either because they have the Coronavirus, they have Coronavirus symptoms, someone in their household has Coronavirus, even though they do not or if they have been told to self isolate by a doctor. So the rules here are going to vary quite dramatically. Besides, note that if employees have been furloughed either in the UK or otherwise, there may be some consideration needed about what status they are actually on whether they are sick or whether they are furloughed and consequently what payments or regimes you are going to need to follow. That is a bit of a tricky area we are touching on in a bit shortly.
Generally employees who are sick and on sick leave are entitled to their usual sick pay and local guidance and contracts need to be consulted to understand what that might be. With SSP in the UK, the employee still have to qualify for it that has not been removed. That means they will need to self certify for the first seven days. They will also need a doctor’s note or possibly a self isolation note from the NHS. So it is a good time to check your workplace policy on absences from home, absences from work more generally, and ensure that your managers know what is needed under that policy from your employees so that you can be asking for the right information. You might also need to be flexible in your approach. For example, employees with severe symptoms may not be able to get the right kind of notes straight away. And the same with the typical process for fit notes when employees are returning to work after a period of sick leave. Time off to care for others is another area that is likely to cause questions. For example, if the employee themself is not ill, but they are taking time to care for an elderly neighbor or relative or even children as a result of school closures.
Again, this is going to depend upon where your employees are based but there is unlikely to be a statutory right to pay for this time off given that the employee is not ill themselves. But you might be able to offer pay depending upon the contract or your workplace policy for absence. In terms of caring for children, it may also be possible for the employee to make use of some other forms of family leave provisions that you have in place, or flexible working policies. So it is all again about communicating with your employees and finding the best resolution for them. Some of the trickier questions in this area are definitely those about what medical steps and information you can require of employees in these circumstances and what you can and cannot do here is likely to be governed by local rules in each country. After a high level, it is going to be important to balance the obligation to provide safe working environment against the privacy of your employees. To take an example, whilst it might be reasonably justifiable to ask employees to self report that they are at risk, or that they are experiencing flu-like symptoms, it probably would be unreasonable to require employees to disclose that information about themselves. In terms of other medical screenings and checks that you can ask employees to undergo in most cases in Europe, it is not possible to require that employees see a doctor or undergo a medical examination without their consent to do so. You should check your employment contracts because you may have a contractual right to ask the employee to see the company’s medical advisor. But again, you cannot force them to do that, unless they consent. Your approach also has to be consistent with this to avoid any possible discrimination claims. In terms of any information received as part of this process that relates to the employees health, this is going to attract legal obligations on the local data protection laws.
For example, in the UK, such information will be one of the special categories of data under the data laws and without employee’s consent to processing that data, you are going to need a lawful basis for processing. Because it is such sensitive data about an individual, you should also be careful in terms of wider communications about employees who are ill, or who are self isolating to ensure that any communications does not include any data about the individual who is absent, or information from which they could be identified. So that is definitely something to warn your managers about because it is something that could easily be slipped back on.
In terms of the next topic on dismissals and alternative options. It is obvious, that in many areas businesses are being affected and this is either having an impact in terms of demand or financially, which is resulting in workforce considerations to try and keep as much cash in the business as possible. Most countries that are actively encouraging businesses to consider everything else before they resort to dismissals. Some of these options will be things like career breaks, maybe sabbaticals, enforced leave or vacation, furlough, which is where you are asking employees to remain employed and not undertake any work, and to have a reduction in the amount of hours that they do, or to even take a pay cut, with or without a reduction in hours. In most countries, many of these options will still require an employee’s consent, because it amounts to a change in their terms and conditions of employment. So that cannot be imposed unilaterally. If you do try to do so you run the risk of claims from the employee, for example, you could have a breach of contract claim, which would entitle the employee to sue for damages. It may also render any post termination restrictions unenforceable. So it is something you want to avoid. You might see claims for unlawful deductions of wages. If you make a pay cut without an employee’s consent, or even constructive unfair dismissal claims.
Practically there may be some ways to position this, for example, with large workforces it is going to be very difficult to ensure you get, for example 5000 workers to sign the consent to changes in their terms and conditions. And what do you do if only 4000 sign the letter. So, there may be some kind of practical but risk based approaches to this where you could use consultation, and maybe follow up with a letter to confirm the agreed arrangements, but it is always advisable to discuss those different options on the possible risks with your attorney. Many clients are also finding them whilst employed, of course not delighted with the changes that they are being presented with when they understand the situation and that the alternative could be their redundancy. Such temporary changes are much more palatable, particularly if employees can see that everyone is making a formal sacrifice and even managers or C suite positions are taking a form of pay cut.
Sometimes it is just not possible to avoid making dismissals and in the circumstances, which can mean redundancies. If that is the case, the key things to think about there is that the employment laws in the country that youare operating in, will in most cases still apply as normal. There may even be some changes to them. For example, in Italy, there is currently a temporary ban on dismissals, which is absolute. So please do check, kind of the local advice before you head down that route. In the UK, redundancies would still need to be handled in the normal way, which would involve consultation requirements to avoid unfair dismissal claims from eligible employees. Those rules have not been loosened or removed in any way. Another thing to note, as well as dismissals are in large numbers. So in the UK, where you are making over 20 people redundant in a 90 day period, that consultation process becomes much more onerous requires employee representatives and a formal notification to the government. So message here is to be prepared and understand the implications of local laws you are operating in. Whilst there might be temporary measures in place that can help you now to avoid making dismissals, if it looks like in the long term dismissals are still going to be need to be made, start planning for those now and forward plan for it because it might involve certain negotiations or consultations with employees or trade unions or works council and someone like you can be preparing now to save you time and cost in the long run.
Finally we are just going to touch upon some of the legislative changes of notes in some of the key countries. Most countries have, via their local government, introduced emergency support and legislation. Certainly in the UK, we have seen more legal updates in the past month than I can remember. The key thing here is making sure you are keeping up to date with developments in the countries in which you are operating. Given the impact of Coronavirus we are touching almost every area of business with developments are wide ranging beyond just employment. But in terms of the employment updates, I can speak to a couple of the main changes that we are seeing in the UK. So in the UK, the main development is that the UK government on the 20th of March announced a Coronavirus job retention scheme. Under this scheme, employers are able to claim back 80% of the wages of employees who are furloughed where they are placed on a leave of absence. They are not required to undertake any work but that amount is subject to a cap of 2500 Great British pounds per month. They can then also claim back any associated employee and National Insurance Contributions and minimum automatic enrollment pension contributions on paying those wages which can, in some instances be backdated to first of March this year.
The aim of that scheme is to be up and running by the end of April and HMRC are working overnight to make that happen. So watch this space. This is quite revolutionary because the concept of furloughing employees is a completely new one in the UK but it is the main kind of temporary action that we are being within our UK clients take. At the moment, things to remember are, it is a change to employees terms and conditions, so it has to be agreed by employees. You cannot impose it unilaterally. There are also some gaps and we are constantly receiving more guidance from the government about the different ways that this interacts, for example, with sick leave and with holiday. Please keep an eye out on the vacations you are looking to make the most blocky and keep an eye on the guidance if you are looking to make the most about scheme. Another thing is HMRC have reserved their right to fully review employees use and access to the scheme. So keeping contemporaneous notes is going to be very important. Second change to quickly mention is in relation to SSP statutory sick pay, other than the changes I meant earlier it can now be claimed from day one of absence due to Coronavirus rather than day three.
Employers with less than 250 employees can actually reclaim that SSP that is paid in this period. There are some of the changes in the UK but as I said lots of different European countries are also introducing emergency legislation. To pick up some other examples, have been particularly affected in France, they have introduced a decree with new provisions on short term layoffs so they can reduce employees working time or close temporarily, and the government will bear the cost of 70% of employees salary while on that partial activity and similar programs have both been introduced in Germany, Belgium, and Spain. In France, they have also relaxed the works council consultation requirements. Previously this had to be done before such an event of reducing employees hours, it can now be done within two months of the application. Again, some other countries are relaxing their work council requirements. It is always sensible to check the particular guidance from the local governments that you are working with. Finally, in Italy, they have also introduced some changes, a new decree called the Cure Italia, but does not provide for measures where employees can suspend or reduce activities and allows companies to request an ordinary wages guarantee fund an ordinary allowance for a maximum period of nine weeks between a particular period in February and August this year. They have removed that normal procedure that would be required and the Italian laws for trade union information and consultation requirements to be carried out in advance of that happening. But as I said, that is just a few of the changes to kind of highlight that, lots of different governments are making some really important and helpful changes to help businesses out. So please do kind of reach out to your local attorney, and to find out exactly what they are and how you can benefit.
Tallin: All right. Thank you, Rachael and thank you Ragu for your great overviews. We really appreciate those. So we do have a few minutes for some questions that have come in that we would like to cover. Ragu and Rachael, feel free to answer these as you see fit. I will start with the first question that came in. So the first one is for employers of essential service companies.
1. What is the best course of action to take if an employee who is healthy and able to work is refusing to come into work due to fears of health precautions related to COVID-19?
Rachael: Thanks, so I think I touched on this one briefly as I was speaking, but this is a difficult one. The best thing to do is simply speak to the employee and understand what it is exactly that is causing them concern. It may be something that you can change quite easily within your business either kind of something to do with public transport with the example I gave or maybe common areas in your workplace or the hygiene steps you are taking to kind of give them the reassurance that they are safe while you are in their environment. It may also be of advice you that they are living with someone who is much more vulnerable than them and that kind of conscious of that and that is something else in its entirety. So if that is the situation, you might need to explore ways to give them that time off or to furlough them. So it is a difficult one, but definitely the first step before kind of going down that immediate kind of disciplinary on this conduct route, would just to try and have a sensible conversation.
Tallin: Okay, great. Thank you. And our next question is –
2. If we have hourly workers that are working from home, during the office closures and mandatory lock downs, what are the procedures or regulations for tracking their time work?
Rachael: To transmit something quickly I think the normal rules for working time would apply here. It is just a question of making sure your employees record the time that they are working wherever that is.
Ragu: It depends on what kind of workers they are. A lot of people may have access to, like in a manufacturing environment, they cannot really go to work, so working from home is not an option. But if there are office workers, they may already be doing the timesheet to a system or just to some other time reporting mechanism, you can you can track it from there.
Tallin: Okay, great. Thank you Ragu. Our next question is –
3.Could you please provide examples of strong disaster response communication?
Ragu: It is a good idea to read the paper and you see what companies are doing, especially the larger companies, but like I pointed out in my conversation, the message has to come from the top, the message is to be crisp, the message has to be able to be disseminated to every employee. If you are looking at the employee side of it, if you are looking at customers, how do you inform your customers, you have a comprehensive customer list that you can email to. But the response depends on what it is that is your business. Retail stores might just be able to put up a sign, including hours that they are open. What some retailers are doing is they are updating their open times on Google Maps, so you can look that up. Those are options that you can use to communicate.
Tallin: Great, thank you Ragu. And our next question is –
4. Considering how this pandemic will take more time to set up than anticipated. Are there any guidelines for what will occur if and when employees exhaust all available leave entitlement?
Rachael: I think this one really depends upon what category of need an employee is falling within. In most European places, European locations is treated differently than in the US. So everything’s distinguishable between holiday and sick leave or posting for parental leave, for example. It is a question of understanding which category the employees falling within, treating them appropriately based on that, and that will have a knock on impact to the company, the amount of salary that they are receiving during that time. Also, understanding when they are on this new like many countries have imposed this kind of formal furlough scheme, and how that interacts as well with those different kind of holiday and sick leaves and Status. So I think it is about making sure that employees are falling within the right category and I think in those circumstances, it is probably unlikely that they are going to exhaust all of their leaves. But if they are looking to do that, with one that kind of springs to mind is parents looking after children, they are unlikely to want to use all of their holiday for that time. So it is then thinking a bit creatively in terms of what are the parental leave, might they be able to use and in the UK, parental leave would be a great example of something that might be an option for them.
Tallin: Okay, thank you, Rachael. And our next question is –
5. What actions can be taken to terminate an employee based on performance during current circumstances?
Rachael: To be honest, I think that was probably going to be difficult to do if we are trying to do it compliantly, which of course, most employers are. However, if an employee can genuinely work in the usual way, there could be an argument that normal kind of performance criteria that you use in a performance improvement plan can continue to be measured in the same way. But it probably be advisable to think about any reasonable adjustments that you could or should make to that, or maybe extend the duration of the PIP. As part of that, it is really going to be key for managers to just kind of keep communicating with employees to set those clear goals and tasks and offer supervision wherever they can. Any employment tribunal who was looking back at this retrospectively would probably have quite a lot of sympathy in the employees favor given the circumstances at the moment. So I would exercise that with caution and definitely can talk it through with your attorney.
Tallin: Right. Thank you, Rachael. And our last question that we’re going to cover today is –
6. What should companies keep in mind when planning for return to business, as usual, once the all clear is given?
Ragu: So let me answer that one. A little bit of it depends on the type of business, for example, in China, where Disneyland is requiring for you to show your QR code to be able to enter proving that you are not infected. But it also depends on how fast and what the opening timeline looks like. Is the government just gonna say, “Yep, we can all go back to work”, or will there be some kind of a stepped approach to say these are the kind of people that are allowed to go back to work and stuff like that in installments or something like that.
Also, I think one thing that employers need to keep in mind that the need to allow employees to take it easy where if some employee has an elderly member or a young kid at home, to allow them to continue to work from home, if possible to accommodate those kind of requests. This way, the workforce has a little bit more flexibility versus everybody coming to work and possibly somebody being infected and causing ongoing infections. So these are the factors that we like to keep in mind as the virus dies and we are able to go back to work.
Tallin: All right. Thank you Ragu.
We have run out of time for the webinar. We would first just want to thank Ragu and Rachael for their time today. So thank you very much Ragu and Rachael.
Rachael: Thank you.
Ragu: Thanks, Tallin.
Tallin: Yes, and we also want to thank everybody for attending the webinar today. We hope that this was valuable information to you and your businesses. We know that these are hard times that everyone is dealing with worldwide and hopefully some of these insights can help navigate the situation. For those that did ask questions that we were not able to answer in the webinar, we will be sending out answers individually via email. Just as a reminder, we will also be sending out a copy of the webinar and the slide deck upon completion in the session as well. If you do have any further questions, we do want to encourage you to reach out to us via email. You can send us an email at firstname.lastname@example.org or at our phone number that’s listed here on the screen. Thanks again for attending the webinar and we hope you have a great day.
Ragu: Thanks, everyone.
Rachael: Thank you.
Ragu is an award-winning serial entrepreneur and CEO of Global Upside, which is part of the Global Upside Corporation, a conglomerate of brands providing the most comprehensive range of PEO, human resources, accounting, payroll, and talent acquisitions services in 150+ countries. Our brands service an expansive customer base, ranging from startups to the world’s largest enterprises. In his previous roles, Ragu was the CFO at ActivIdentity (ACTI) and held leadership positions in several companies including Deloitte and NetIQ (NTIQ).
Rachael is a UK employment lawyer based in Osborne Clarke’s San Francisco Bay Area offices. Osborne Clarke is an international, full-service law firm with offices across Europe and Asia with a simple goal: to help clients and their people succeed in tomorrow’s world. Rachael works closely with US and international companies, providing in time-zone advice on UK employment law, HR, and international expansion issues. She also works internationally on European and Asian employment, executive compensation, and corporate immigration matters and cross-border projects.