Adapting Employment Law During a Crisis

When looking at the broad range of topics covered by employment law, it would be easy to conclude that the law is comprehensive and covers every possible aspect of employment. However, the Covid-19 pandemic has given us an interesting insight into the limitations of the law, and how it had to be amended to meet employer and employee needs.

Back in March 2020, the government imposed the first national lockdown. This meant that many businesses had to close overnight, with many employees having no work to do the following day. Those employees would have had a contract saying that the employer would provide them with work and would pay them. The employer was no longer able to do this. So, what happens?

If an employer is temporarily unable to provide work (and although the lockdown went on longer than most people initially anticipated, it was temporary) it can lay off employees. However, unless it has put a layoff clause in the employees’ contracts of employment saying that the layoff is unpaid the employer must pay the employees during the layoff period. Most employers do not have layoff clauses, and therefore they would have had to pay employees whilst they were not working. If the business was closed, the employer had no money coming in and was unlikely to be able to pay employees for a lengthy layoff period. So, for most employers layoff was simply not an option.

The alternative was to dismiss employees due to redundancy. However, employers would be reluctant to do that because it would have made it difficult to get their business up and running quickly when the lockdown came to an end because there would have been no employees to do the work. Mass redundancies was not something that the government wanted because of the negative impact that this would have on the well-being of individuals, and the cost of supporting so many people through the benefit system.

There needed to be an amendment to the law to fill the gap that was left by the inadequacy of using layoffs, and the desire to avoid redundancies. The solution was the Job Retention Scheme. This allowed employers to claim up to 80% of an employee’s salary back from the government whilst the employee was not working (and the employer could choose whether or not to pay the remaining 20% of the salary).

The creation of law typically takes many months, if not years. The Job Retention Scheme was created in a matter of weeks. It is an excellent example of an external pressure requiring a change in the law, addressing an issue that no one had predicted.

The pandemic also exposed another weakness in the law, relating to Statutory Sick Pay (SSP). An employer has to pay SSP to an employee who is unable to work due to sickness. However, the first 3 days of sickness are unpaid – these are referred to as working days. Applying this to Covid, meant that an employee who had symptoms of Covid, and who had work available to do (i.e. was not covered by the Job Retention Scheme) had an incentive to go to work because they would not be paid if they did not attend work. This ‘incentive’ to work meant that employees might be more likely to go into the workplace and infect colleagues with Covid, increasing the likelihood of employees becoming ill and increasing absence rates. Clearly, the government did not want this to happen and it needed to remove this ‘incentive’.

In response to this problem, the government removed the SSP waiting days for Covid related illnesses. This meant that employees could go off sick as soon as they experienced symptoms of Covid, and still be paid.

The law protects both the employer and employee in ‘normal’ times. Covid-19 has shown us that, when the unpredictable happens, the law might not always be adequate. Introducing the Job Retention Scheme and altering the rules relating to Statutory Sick Pay were needed to make the law effective in unusual times.