Covid-19: Financial, business and HR support guide

[UPDATE: This advice has been updated following the Government's announcement last night (Monday, 23 March) that all non-essential retail businesses must close. Beauty salons (read: aesthetic clinics) were specifically named.]


The Government has pledged to provide more support to UK businesses in light of the coronavirus pandemic. A cash injection of £350bn has been promised to support businesses, but what financial support is available for your clinic?

On March 20, the Chancellor announced he will be helping to pay people’s wages which will be applied in a number of different ways:

Following on from the 2020 Budget the Government announced on March 18 that it has extended the financial support available to small businesses:

Staff and HR advice

Coronavirus (COVID-19) is impacting all businesses, but for small companies in the service industry, particularly salons, spas and aesthetic clinics whose business model based around human contact, the impact has been severe.

As you might expect in our caring industry, the number-one concern for many clinic owners is how to best support their staff, especially now that non-essential businesses have been forced to close.

Kirsty Mawhinney, founder of Skin Insight Branding Agencyinterviewed several salon owners to find out what the industry wants to know, and put them to Rebecca Day, founder of Day HR Consultants and former HR director at Estée Lauder, to get some specific advice for beauty and aesthetics businesses:

 

With school closures in place, what support am I required to give staff so they can look after their families at home?

Talk to your team to establish how the school closures affect them. Unless employees are ill, or self-isolating because they have returned from a travel hot spot, have been in close contact with someone who has Covid-19, or are exhibiting symptoms, they are not eligible for statutory sick pay.  

Therefore, if someone cannot come to work because they are caring for their children, you will need to discuss and agree what temporary measures you put in place in terms of their pay.  This could be paid leave or unpaid leave. There is no obligation to keep them on full pay.   

For employees taking unpaid leave, you might also want to consider whether you are able to deduct that over a few months rather than all at once. 

Work out your cash flow and business reserves and make your decision accordingly.   

Also, do encourage employees who need to stay at home to care for their children to apply for universal credit to help them through this difficult time. The rules on Universal Credit have been relaxed and the threshholds for eligibility have been brought down. 


If staff are pregnant or fall into the vulnerable category, what procedures should I put in place to protect their health, and should I be enforcing self-isolation? 

As above, at the current time, pregnant women, the over-70s and those with underlying medical conditions have been advised to socially distance themselves but, for the time being, it’s not been mandated. The goal posts are moving all the time in line with transmission rates so this advice may change.    

Talk to your pregnant employees and ask them how they feel about the guidelines and what they would like to do. It’s important that you don’t put them in a difficult position and persuade them to remain at work if they would rather not.  

If anyone in the vulnerable group decides that they want to stay at work (and it’s important that they feel under no pressure to do so) then carry out a risk assessment to see how you can minimise any risk even further. For example, try staggering their work times so that if they do travel by public transport they do so when the trains or buses are less busy.

Or consider creating an area in the salon that they can isolate themselves in if, for example, the spa or clinic suddenly becomes busy or, you are concerned that a client might not be well. It’s also a good idea to ask them what further suggestions that they have to minimise risk.


If I have to close my clinic, what are the implications for employees?

It’s important to start contingency planning as soon as possible to prepare for a downturn in business and for any enforced lock down.

The first thing you should do is to check employment contracts to see if there is a contractual clause that gives you the right to put people on short-term working – i.e. temporarily reduce  the number of days or hours they work and pay them in line with that reduction or, to lay them off temporarily.

– What is a lay-off?: The employer provides its staff with no work (and no pay aside from a nominal guaranteed payment) for a period while retaining them as employees.  

If the right to invoke short-time working/lay-off is in your contracts, then meet with the team, tell them that in order to protect the long-term future of the business, you need to make some temporary changes which means evoking short-time working or a lay-off.   

If there is no contractual right, you can’t enforce short-time working or a temporary lay-off and any reduced hours or lay-offs must be on that team member's contractual rate of pay.

However, you can negotiate with employees and ask them to agree with temporary measures to protect the long-term future of the business and jobs.

In this instance, invite them to give you their suggestions on how you can reduce salary costs while there is no revenue coming into the business.

If employees refuse to agree to this, there are a couple of options available to you.   

1. Make redundancies 
2. Consult with them and dismiss them on the basis of "some other substantial reason", and then offer them re-engagement on revised terms

During temporary lay-offs, employees need to be paid a statutory guarantee payment, which is £29 per day for the maximum period of five days within a three-month period.

This is pro-rata for employees who work part-time. This is the minimum you have to pay and you may decide that you want to pay more. If you do pay more, you do not need to pay the statutory guarantee payment on top of this.

During a lay-off, all contractual rights, aside from pay, are maintained. This means that employees continue to accrue holiday.

While you can’t claw back the statutory guarantee payments, the Government is pushing through financial measures to support businesses. See current advice for businesses.

If a lay-off lasts longer than four weeks, or is more than six weeks in a 13-week period, then employees can claim that they are due a redundancy payment. See here for what to do if this happens.

Under normal circumstances, employees may not find this an agreeable option. However, given the extenuating circumstances, most employers are reporting that, on the whole, staff understand the difficulties and are willing to accept a temporary lay-off. 


I'm worried my business is going to collapse. Should I make redundancies now?

It’s a good idea to avoid a knee-jerk reaction and make any long-term decisions after the Government has announced the full range of financial support they are going to provide to businesses (such as local authority grants and favourable loans).  

Similarly, you need to think about what happens after the crisis is over which means ensuring you have the right staff to ensure business continuity.

In the meantime, some sensible measures are:

Cease any recruitment activities 

See if you can delay the start date for new joiners


Can employees be asked to take holiday?

Holiday can be agreed and may be an alternative to receiving only SSP where the employee is well, required to self-isolate but not able to work from home.


Can employers send employees home to self-isolate?

If an employee falls under Government guidance to self-isolate (i.e. they are displaying symptoms identified in that guidance or would otherwise be required to self-isolate due to recent travel or contact or for other reasons as per such guidance), then the employer should send the employee home. 

While ordinarily this would be considered medical suspension on full pay, this is consistent with health and safety duties to other employees and Government guidance and, as such, they should be sent home to self-isolate.   

If they can work from home, they should do so and should receive normal pay. If they aren’t able to work from home, you should pay SSP or contractual sickness pay.


What if an employee won’t come to work due to fears about coronavirus?

If the employee isn’t sick and self-isolation requirements don’t apply, then they are not eligible to receive SSP. 

However, many people are frightened and you should listen to their concerns, consider these carefully and review this on a case-by-case basis. 


Useful references on employment law during Coronavirus: 

Acas 

Goverment.uk pages on:

Social distancing

Universal Credit

Information for the public

Advice on "Some other Substantial Reason" rule

Advice for employers and businesses

Lay-offs and short-time working

Employment Law & HR Advice for Employers 

Keystone Law articles:

Coronavirus: Can employers lay off staff or introduce short working?

Coronavirus: Pay and sick pay

This advice piece was written for Aesthetic Medicine sister title Professional Beauty by Kirsty Mawhinney, founder of Skin Insight Branding Agencyin collaboration with Rebecca Day, founder of Day HR Consultant.