How might working life in the UK look as we exit the lockdown?
Even as the UK begins to come out of lockdown, businesses will still have to tackle considerable challenges in trying to get their workforce back into a safe workplace and restarting their production/output at sustainable levels. They will particularly face:
- Difficulties in getting the workforce to their workplaces if social distancing remains nearly impossible on public transport
- Problems with workforce availability if schools remain shut leaving employees with childcare requirements
- The dilemma of how to introduce correct health and safety and social distancing measures within the workplace
- Future periods of lockdown or extremely restricted movement
Tackling these issues will undoubtedly leave the composition of the UK workforce and the nature of its working life looking very different.
- There have been indications that the Government is considering separating the UK workforce into several sectors and applying different guidelines for each to return to work safely. Initial reports suggest the economy will be divided in to seven workplace environments – outdoor work, non-food retail, transport and logistics, manufacturing, indoor work, work in the home, and hospitality and leisure
- Another potential approach could be “social bubbles” where people would be allowed to mix within a group of say 10 other people without social distancing
- Many workplaces will be likely to require redesigning with increased signage and new measures in place to allow for adequate social distancing
- The UK may see a significant increase in part time working, with workers either coming in on alternate days or workplaces that have previously been 9-5 moving towards shift work
- We could also see a marked increase in the use of flexible working practices, as many businesses have come to realise that much of their output can be provided remotely
To get ahead of the game we would recommend that business and employers should have consideration for the following matters when considering a return to work.
On 11 May 2020 the Government published its ‘Our Plan to Rebuild’ guidance and eight ‘Working Safely During Coronavirus’ guides, which set out guidance for employers on the future of the workplace. These documents provide more detail on how the workplace is likely to change moving forward. We have published an article looking at this guidance and the implications for the future of the workplace.
Key features for HR and benefits practice for the next 12 months
- Given the speed with which the first wave of the virus swept through geographic areas and sectors a key requirement for all businesses will be to have adaptable and agile teams in place ready to respond to what could be rapidly changing circumstances
- This should also include planning for support of key employees or directors who may remain in post if another round of furloughing occurs
- This could include access to advisor support in a range of key areas to assist a small team to resolve issues
Pensions and employee benefits
Whilst government guidance will certainly have an impact on pensions and employee benefits the points below can act as a starting point for your considerations. Also see our Coronavirus: Employee Benefits and the return to work article for our thoughts on how employers may want to consider restructuring their broader employee benefits package to ensure that their employees feel safe and supported to return to work.
- Automatic enrolment duties
- If employees are moved to part time or shift work, employers’ automatic enrolment duties will still remain, however the required contributions may change
- There is the possibility that a reduction in hours could take an employee below the Lower Earnings Limit and therefore remove the requirement for contributions
- If salary sacrifice is used this will need to be monitored and adapted dependent upon the working structures utilised from time to time
Employers should check their scheme’s Trust Deed and Rules and consider the impact of any provisions for part time working. They should also ensure that their payroll provider is carefully monitoring any changes in employees’ salary to be certain that no mistakes are made when calculating contributions.
- Pension contributions more generally
- In schemes where employers are offering contributions above the automatic enrolment minimum, can they continue to make these higher contributions given the possible changes in profitability?
- In schemes where employees make contributions above the automatic enrolment minimum, but those employees have been moved to part time work, they may wish to try to reduce their pension contributions
Employers and businesses should carefully check their scheme’s Trust Deed and Rules to determine whether changes to contribution levels could and/or should be made. Bear in mind that changing the rules may necessitate a statutory pensions consultation and/or an employee consultation.
- Death in Service benefits
- If an employee’s hours are temporarily reduced, what effect will this have on any Death in Service benefits calculations?
- If an employer has individuals in their workforce who are classed as “vulnerable” or “very vulnerable” will they be covered by any insurance policy if they choose to come in to work?
Employers and businesses should check the wording of their Death in Service and underwriting insurance policies carefully and may wish to consider whether amendments can be made.
- The end of salary sacrifice arrangements?
- Salary sacrifice has posed significant issues for both employers and employees looking to make use of the furlough provisions of the Coronavirus Job Retention Scheme. With possible future periods of lockdown employers and employees may decide that the costs of salary sacrifice during lockdown outweigh the benefits during ordinary periods of working
- The reduction in pay under a salary sacrifice arrangement creates a corresponding reduction in any Death in Service benefits. In such uncertain times, employees may want to increase these available benefits as much as possible
- Salary sacrifice arrangements cannot be used if doing so would reduce an individual’s salary to below the national minimum wage, this may prove problematic if employees move to part time work and receive a reduction in pay
- Childcare vouchers provided through salary sacrifice arrangements may lose their value if part time working allows parents to undertake childcare themselves
Employers and employees should review their salary sacrifice arrangements carefully. It may be that individuals should be given the opportunity to opt out or that the entire arrangement should come to an end. Employers will need to check the drafting of these arrangements to ensure that the opt-out provisions are wide enough, and will need to consider alternative methods of making pension contributions in order to meet their automatic enrolment duties.
- Trust based schemes (especially where more remote working by trustees is needed)
- Do the scheme rules allow for business to be conducted by video conferencing/telephone conferencing etc?
- How will scheme documents and agreements be executed?
- Are appropriate data protection and cyber security measures in place? This would also apply to any remote HR working
Employers and trustees must review the Trust Deed and Rules carefully and should try to ensure that any amendments necessary to allow for remote working are put in place as soon as possible.
If you would like to talk through the consequences for your business, please email us and one of our team will get in touch.
The content of this page is a summary of the law in force at the date of publication and is not exhaustive, nor does it contain definitive advice. Specialist legal advice should be sought in relation to any queries that may arise.
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