Coronavirus  

How advisers may have to reshape their business post coronavirus

  • Explain how firms should manage employees' office return
  • Identify the different employee pay options firms could consider
  • Identify employment risks
CPD
Approx.30min
How advisers may have to reshape their business post coronavirus

As the Covid-19 pandemic continues, no business can be sure exactly what the future holds. 

Without doubt, it will be different and challenging. 

Financial advisers will already have been affected in different ways. 

Those heavily exposed to the property market may have found that activity levels have plummeted. 

Many will have relied on the government’s furlough scheme to keep people employed or will have introduced pay cuts.

Others may have experienced increased demand for their services, as clients try to adapt to turbulent financial markets and falling incomes. 

In most cases, communal office working will have temporarily ceased.

Below are some of the key employment law considerations for how Ifas can navigate the Covid-19 pandemic and reshape their organisations and employment relationships to cope with the new reality, while minimising legal risks.

Reshaping

Many business owners are grappling with their strategic plan. 

Some will need to slim down or even close while others will need to refocus.

Almost all will need to change their existing employment relationships.

There will be great opportunities for businesses that can adapt.

Redundancies/pay cuts

>Employers should consider whether to propose changes to the basis on which pay is calculated, for example to increase the performance-related proportion, rather than simply cutting basic pay. 

Businesses facing hard times may need to reduce their payroll costs drastically, particularly when the furlough scheme is wound down. 

This will involve reducing the number of employees, implementing pay and benefit cuts for employees, or both.

Temporary pay cuts may have been implemented during lockdown, but it should not be assumed  they can be lawfully continued on an indefinite basis. 

Any indefinite pay or benefit cuts will almost certainly require the consent of the employees concerned, if this has not already been given. 

Although consent can be given by conduct (such as continuing to work without protest while receiving reduced pay), it is preferable to seek express written consent.

Employers should consider whether to propose changes to the basis on which pay is calculated, for example to increase the performance-related proportion, rather than simply cutting basic pay. 

Consent is more likely to be given if the pain is perceived as being fairly (but not necessarily uniformly) applied at all levels throughout the business. 

Employers should consult carefully with employees about the reasons for any proposed cuts, before any decisions are made. 

Where 20 or more employees are involved, employers should also consult collectively for a period of at least 30 days (45 days if 100 or more employees are involved) with elected employee representatives or, where a trade union is recognised, with trade union representatives.

Where there will be a choice between accepting a pay cut or being made redundant, that should be made clear in the consultation processes.

CPD
Approx.30min

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