Protecting your business and securing your workforce – key decisions to get you through COVID-19

At the end of last week, the States of Guernsey announced a first round of Coronavirus support measures for businesses. These include deferring TRP and employer social security contributions for Q1 / Q2 for many employers (excluding for the time being professional services and financial services businesses) and establishing a hardship fund. The hardship fund aims to support staff in sectors hardest hit, such as hospitality, tourism and construction, who may be facing lay off without pay for many weeks.

Over the weekend, the Committee for Home Affairs announced it will be working with the Civil Contingencies Authority to make proactive adjustments to the population management regime in light of the current travel restrictions and their impact on the local economy. The Committee's aim is to prevent those who may have lost their jobs or been put on temporary lay-off from having to leave the Island, at the same time providing resilience in terms of a flexible, available workforce to do necessary jobs as we adjust to these different times.

Against this backdrop, what can employers do themselves to keep staff in employment and increase resilience until the worst is behind us? We suggest some measures below, with some being more far-reaching than others.

Where the suggestions impact employees' terms and conditions (in particular pay, working hours and valued – and valuable - contractual benefits) they should only be introduced after consulting with staff and getting their agreement to the change.

In the current climate, we would expect staff to be more open to change, but this will still require clear communication around the reasons for change and written confirmation of what those changes look like.

Although we normally recommend that this is done by a variation letter, evidenced by the employee's counter signature, in our view an email would suffice. We would, though, recommend you get a read receipt and request confirmation of your employees' agreement to the change by return. If they do not confirm, or respond but object to the change, you will need to follow up to prevent a risk of a breach of contract claim or a claim that they continued to work, but under protest.

Measures to consider are:

  • Restricting new recruitment
  • Deferring start dates
  • Withdrawing job offers for new recruits: provided the offer hasn't been accepted, there will be no liability. If it has been accepted, a contract will exist and the employee will be entitled to notice. If the contract provides for shorter notice during probation, the shorter notice period will apply. The right to be paid will normally only start on the day the job starts, so the employee is only entitled to be paid for any balance of notice falling after the start date. For example, if P's contract provides for 4 weeks' notice during probation and notice is given one week before the employment is due to start, P is entitled to be paid in lieu of 'lost' salary for the 3 weeks falling after the start date; if P's notice had been one week in this example, P would not be entitled to any payment in lieu on the basis that he/she has no entitlement to be paid until the start date and so has no claimable loss under the contract after the start date)
  • Voluntary unpaid leave or a voluntary unpaid sabbatical
  • Requiring staff to take pre-booked holiday (even if their travel plans have had to be cancelled), or to take annual leave in accordance with an agreed schedule (eg by department)
  • Reviewing benefits (we would not encourage interfering with medical benefits or health insurances at this time). Any employer pension contribution 'holidays' would require very careful consideration and consultation with Trustees where appropriate and staff (or their representatives) before being implemented
  • Stopping overtime
  • Freezing bonuses
  • Freezing pay reviews
  • Reduced hours working with a pro-rated reduction in pay
  • Reduced remuneration without reducing hours: if this measure is introduced, it will need to be led from the top and the economic reasons for doing so clearly communicated to staff after careful analysis (and sufficient explanation) of the organisation's financial position
  • Voluntary retirement
  • Voluntary redundancy

The above list isn't exhaustive and reflects longstanding and well understood alternatives to redundancy in normal times. Against the backdrop of a public health emergency impacting on all employers, it may well be that novel measures are devised. If your business comes up with any innovative solutions which you would like to share, please email us at This email address is being protected from spambots. You need JavaScript enabled to view it..

GUERNSEY
Louise HallManaging PartnerT +44 (0)1 481 748909louise.hall@walkersglobal.com
Sarah AshSenior CounselT +44 (0) 1481 748 935sarah.ash@walkersglobal.com
Victoria PrattSenior CounselT +44 (0)1481 748 938victoria.pratt@walkersglobal.com