The Coronavirus is hitting world news and we would like to dispel some myths and also give advice to companies on how to deal with this impending issue, here in the UK and Europe. Companies are waiting so see how long disruption caused by the outbreak lasts – and how big the impact on their business will be.
Although China and Europe may seem a long way away, many businesses rely heavily on China and other European countries for parts and manufacturing, amongst others, so this adds a layer of uncertainty, to an already precarious business environment. Companies around the world are counting the mounting cost of disruption caused by the coronavirus, as the virus fall out disrupts global supply chains.
We have recently worked closely with a European company and have offered advice on the recent, possible implications of the Coronavirus to business and staff alike to assist and minimise the possible impact to their company. Companies need to think about it’s business continuity and cover all aspects should the coronavirus affect them more widely and how that might effect their:
- Supplier capacity
- Shortage of parts
- Delays in export and delivery services
- Impact on the workforce
If the UK and Europe situation does heighten and where there might be a reduction of work as a result of lack of supply of materials, parts, or there is any other occurrence that affects the normal running of the business, a Company has the right to either lay off employee without pay other than Statutory Guarantee Pay or implement shorter working hours.
What is short time working?
Where hours are reduced, employees pay may reduce to reflect the hours worked.
What is lay-off?
Lay-off occurs where an employee is asked not to work for 1 day or more. Companies have to pay ‘Guarantee Pay’ during lay-off. The maximum payment is £29 a day for 5 days in any 3-month period – so a maximum of £145.
If an employee usually earns less than £29 a day, they will get their normal daily rate. If an employee works part-time, their entitlement is worked out proportionally.
If your company is affected you will need to implement a fair process and a good starting point would be to:
- Consult your contract and handbook to check whether you have to pay for lay off and reduced working absences is in line with your terms and conditions of employment.
- Check to see if staff can use up annual leave so there is no detriment to pay
- The Company reserves the right to select the employees best suited to carry out whatever work is available should we need to.
- Employees should be offered alternative work wherever possible.
- Employees who are laid off must still be available for work as and when necessary since continuity of service is not affected by any period of lay off.
- The Company must pay Statutory Guarantee Pay in accordance with the current Government regulations.
- Any employee who is laid off for longer than the Statutory Guarantee Pay period will be given a letter to take to the relevant Government Agency. Employees should then be able to sign on as temporarily unemployed, even though they will still be employed by the Company.
Communication is key
Companies should ensure they constantly communicate with their international partners and suppliers to keep updated on the situation so that you have a lead in time if there was likely to be an issue. You can then plan work to ensure that employees were affected as little as possible.
Companies should also make an effort to communicate regularly with their employees to manage expectations and alleviate anxiety if there are issues that could affect business continuity – or even if to reassure them that everything is ok and running smoothly.
There have been more than 17,000 confirmed cases of coronavirus and 361 deaths. Many Chinese cities are in full or partial lockdown. Here in the UK the disruption is affecting not only smaller businesses but larger operations, too. Although we do not want to scaremonger or cause any further hysteria in a very stressful and unclear situation, the threat to UK and European business is very real and advice needs to be given accordingly.
If your company is worries about the impact of Coronavirus and needs assistance with planning a reduction in workforce requirement, contact us here now.