COVID-19: Is a P45 the answer?

Having made proclamation of its Job Retention Scheme, government has left us in no-man’s land waiting for the detail of the regulations which will govern who qualifies, what they qualify for and how payments will be made.

In the interim we are seeing agencies forced to end assignments prematurely in the face of reduced requirement for labour or, in some circumstances, the forced closure of hirer sites and businesses to comply with government instruction.

In such circumstances, the agency instruction to its intermediary supplier will often be to ‘P45 the worker’ but is that the correct course of action?

The Facts

• The fact that an assignment ends is not grounds to terminate the employment of an individual who is employed either direct by the agency or by a contracting intermediary labour supplier
• The contract of employment will endure and the employee should be given opportunity to find an alternative assignment
• Whether such employees will qualify for the Job Retention Scheme is yet to be clarified. If they do qualify, the government will reimburse 80% of their wages (subject to a limit of £2,500 per month) to the employer for up to 3 months during the period 1st March to 31st May 2020
• If the Job Retention Scheme will not pay such employees, the individual may choose to submit a claim for Universal Credit via the Department for Work and Pensions – if they do this it is likely that they will approach their employer to resign their employment and obtain their P45

The Risks

• If you do not follow correct procedure and terminate the employment prematurely or without due cause, you may be liable to a claim for unfair dismissal or constructive dismissal

  Stop – Review – Consider - React

Take care to consider the individual circumstances of each case and contact us at Aspire for advice on 0121 445 6178.