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Q&A: Returning to work and looking to the future in fashion and luxury retail

Returning to work
On 15 June 2020, all non-essential retail, which includes fashion and luxury retail, is permitted to open for business, provided that safety guidelines are followed.

This means that many retailers will currently be working on plans to start getting their workforce safely back to work in order to prepare stores and check stock in readiness for the reopening.

The government has produced guidance on this topic, which is useful as a starting point.

However, what this guidance fails to cover is how employers should bring their employees back to work. Should all employees be brought back and should this be gradual or immediate? How can an employer continue to maximise its benefits from the government furlough scheme especially now it has been revised to include part-time working? What action should employers take if staff are not comfortable returning but cannot work from home? What can employers do if they anticipate a lasting downturn in work?

Q&A

What is the “new normal”?

Fashion and luxury retail is unlikely to return to pre-pandemic styles of working for some time. As well as this, there is likely to be a reduced number of customers visiting stores due to concerns surrounding the COVID-19 pandemic and the safety measures needing to be taken. 

Working practices are likely to be disrupted whilst employers navigate the new and ever-changing landscape. It is key that employers are flexible in how their business operates following the lifting of restrictions and keep in mind that restrictions, whether these are implemented locally or nationally, could be reintroduced at any time and that there are working practices in place to respond to this quickly.

The new working environment will need to be constantly reviewed and we suggest reviews are undertaken in consultation and collaboration with staff and customers to ensure all parties are satisfied with measures being put into place.

What are the key factors employers need to consider when strategizing their workforce’s return to work?

Employers need to consider how they will open their businesses and what restrictions need to remain in place.

The safety of staff and customers is paramount. Not only do employers have a legal responsibility to protect workers from any risks to their health and safety, but ensuring the safety of staff will boost morale, efficiency and make sure staff feel supported and comfortable in coming back to work. It will also encourage higher footfall to stores from customers who are satisfied with the measures the business is putting in place.

If the workplace is not safe, employees won’t feel comfortable returning to work and customers won’t feel happy spending in store. They are likely to then carry on only shopping online.

We advise employers to consult with staff on changes required to their usual ways of working and truly listen to their points of view. Those working in store will have specialist knowledge on how they normally work and best serve customers and thus what the business will need to implement to keep employees and customers safe whilst still maintaining customer experience. This consultation should be ongoing as experience grows after reopening on how the situation actually is day by day.

As well as this, employers must consider if they envisage a downturn in work or a very slow return to pre-lockdown levels of work and how such effects can be mitigated to allow their business to move forward successfully.

Should all employees return to work on 15 June?

Whilst employees should continue to work from home wherever possible, it is clear that store assistants are unable to carry out their roles from home, which raises the question of who should return to work, when and whether everyone should come back at once.

When the government announced that all non-essential retail was to temporarily close its doors from 23 March 2020, most employers in the retail sector chose to place the majority of their staff, particularly store staff, on furlough leave.

Whether employers bring all staff back on 15 June will, of course, depend on a number of factors including the footfall they are expecting in each of their stores, the size of the stores, the numbers of staff employed in those stores, and the health and safety measures they are putting in place to comply with the government’s guidelines.

If they envisage business to return to the levels it was pre-lockdown, we see no reason why all staff cannot immediately return to work, provided government guidelines are adhered to. However, due to the restrictions and guidelines in place, we consider this to be unlikely. Employers are obliged to make every reasonable effort to comply with the social distancing guidelines set out by the government and this will mean that generally, stores cannot have as many staff working at once as permitted before the pandemic if the layout of the store does not allow staff and customers to keep two metres apart.   

It is therefore much more likely to have workforces returning to work gradually. Shift patterns may have to be put in place and the workforce divided into various teams so that if one person comes down with the virus and that team in-store is taken out of service, there is another team waiting in the wings. The situation should clearly be kept under constant review. The part-time working arrangements in the CJRS could also be used.

If compliance with social distancing is not fully possible, in relation to a specific activity such as an in-store tailoring service, businesses should consider whether that activity needs to continue at this time for the business to operate, and, if so, take all mitigating actions possible to reduce the risk of transmission between staff and customers.

What are the anticipated changes to the Coronavirus Job Retention Scheme (CJRS)?

From 1 July 2020, employers can bring employees back to work that have previously been furloughed on a part-time basis. This can be for any amount of time and any shift pattern and although employers will be responsible for paying employees’ wages whilst they are in work, employers can still claim under the CJRS for time not worked. This is different from the terms of the original scheme where employees on furlough leave could not work for their employer. When claiming the grant for furloughed hours employers will need to report and claim for a minimum period of one week.

For example, an employee who normally works 40 hours a week could be brought back each week on a part-time basis for 16 hours a week. The employer would be required to pay the employee as normal for those 16 hours but for the 24 hours the employee is not working, could claim 80 per cent of salary under the CJRS as normal. The government support available reduces in September and October to 70 per cent and 60 per cent respectively, with employers required to make up the shortfall to 80 per cent, before the scheme ceases in operation on 31 October 2020.  There seems little prospect that it will be extended further.

The scheme will close to new entrants from 30 June. From this point onwards, employers will only be able to furlough employees that have been furloughed for a full three week period prior to 30 June. This means that the final date by which an employer needed to agree with their employee and ensure they place them on furlough was 10 June. Employers will have until 31 July to make any claims in respect of the period up to 30 June.

How can employers continue to use the CJRS to benefit their companies?

Provided employers have furloughed an individual for a full three week period prior to 30 June, employers are able to continue furloughing the individual, fully or partly, making use of the scheme until 31 October 2020.

This means that from 1 July 2020, employers are able to bring staff back on a part-time basis. Bringing staff back, albeit part-time, will allow employees to be trained on any new practices or procedures, such as how to serve customers whilst complying with social distancing or enhanced cleaning procedures, and will support employees gradually to return to work. Part-time working will also provide greater flexibility and enable employers to easily respond to customer demand. It is likely that as restrictions reduce, footfall will increase, meaning more staff will be required in-store.

How should this be put into practice?

We would advise bringing employees back to work following a consultation period and as before, ensuring any pattern of furloughing is by written agreement. As above, flexibility is key to ensure businesses can respond to customer demand and any removal or tightening of restrictions.

Staff morale is also important. If some employees are permitted to work from home, resentment could build from those employees that are required to return to work. To mitigate this, we would advise consulting with employees on the new policies being put into place to ensure these are sufficient to keep them safe. We would also suggest trying to adopt a consistent approach so that everyone is required to do some work unless there is really a good reason why this would not be possible. This is particularly the case when part-time working on furlough comes in on 1 July.  If they do not feel safe returning to work, how do they consider their role could be adapted so they could work from home? If they cannot work from home, what further measures could an employer put in place to ensure they feel safe?

What about the period from 15 June to 1 July?

As set out above, the flexibility to bring employees back part-time commences from 1 July. Until then, if employers decide to open on 15 June, they could select some employees to return to work. Employers would need to ensure that such selection does not fall foul of discrimination laws and should probably follow similar selection criteria that they do for redundancies. We would advise in the first instance to consult with staff and to ask for volunteers to return to work during this period.  The alternative is to bring all staff back from furlough through this period so that they get used to working again and organising training and then consider refurloughing either on a full furlough or part-time furlough depending on how the first few weeks of trading has gone.

For staff who are not working and remaining on furlough leave, it would be beneficial to use this time to provide full training, detailing how their work environment and working practices will be changed when they return to work to ensure government guidelines are met and that the workplace operates safely. Providing full information on how the brand is responding to the pandemic will not only make staff feel safe but will enable staff to educate customers and put them at ease.

Employers may have put various practices into place in line with the government guidance including a new store layout, such as one way systems or markings to keep people two metres apart, or a policy to quarantine products that have been touched for a set amount of time (24 hours or 48 hours depending on the nature of the fabric). Employers should discuss with staff how this fits into their luxury brand experience and request continuous feedback on how these practices can be improved and developed over time as the situation changes.  One to one customer experiences could be offered with trying on permitted but with the promise that products will be quarantined once tried on. Customers should be requested to use hand sanitiser or washing facilities before and after the handling of any products as should members of staff.

Do staff have to return to work?

Staff should not come to work if they are advised to stay at home under existing government guidance. This includes an employee who has symptoms of COVID-19 or who has been advised to self-isolate due to living with someone who is showing symptoms or in accordance with the government test and trace strategy. If employees cannot work from home, they will likely be eligible for SSP. 

If an employee is worried about returning to work, employers should discuss their specific concerns and try and resolve them together with the employee. This should include an employee’s journey into work.  If this involves public transport and that employee is still worried following all the precautions that should be taken (hand sanitising, wearing a mask and distancing as much as possible) then an employer should not force that employee into work.

Employers should recognise that some employees may not want to return to work as they may be high risk, living with someone who is shielding or have caring responsibilities. Again, employers should explore these concerns with staff and take reasonable steps to alleviate them. For example, staff could be kept on furlough leave if they are temporarily unable to work or their hours could be changed on a temporary or permanent basis to avoid travelling in peak time. Employers must ensure that any measures taken are not discriminatory in nature.

If an employee refuses to attend work without a valid reason, it could result in disciplinary action. However, this should really be viewed as a last resort rather than the default position.

What measures can an employer take if it anticipates a lasting downturn in work?

Employers should explore alternatives to making redundancies wherever possible. That would include continuing to make use of the CJRS where appropriate.

If businesses will not need as many roles in the future, or indeed, will require new roles they may want to contemplate restructuring the business.

Employers may also want to explore changing employees’ terms and conditions of employment, for example by changing the start and finish times, implementing shift work, introducing job role changes, inserting lay-off and short-time working clauses or reducing hours and pay. Such changes may be permitted under the terms of the contract or may require express agreement. Employers need to be aware of the risks associated with unilaterally making changes to an employee’s contract.  

Such steps can also be taken on a temporary basis if the downturn in work is thought to be short-term.

We are able to advise employers who are considering making changes to the way its workforce operates and to employees' terms and conditions of employment and can assess if the restructuring or reorganisation that they are proposing amounts to making employees redundant.

If employers need to make redundancies, they should pay careful attention to the relevant time limits and follow a fair and lawful process. As mentioned, if the CJRS is still in place employers should consider very carefully whether it is not better to keep employees on furlough for longer before going down the redundancy route. This may become less commercially viable as the scheme gradually tapers off, but in the period up to 31 July when 80 per cent pay from the Government is still available, employers should consider very carefully whether a continued furlough would not be the better option.

How can businesses encourage customers to come into a store?

As well as ensuring staff are comfortable returning to work, businesses also need to ensure that customers are comfortable visiting stores and that they are reassured that the business has put into place adequate measures to protect them.

Businesses with over 50 employees are required to publish the results of their COVID-19 risk assessment online. We would advise all businesses of any size to do this. Publishing such results will demonstrate the company’s compliance with and implementation of government guidelines and will make customers feel safe and more likely to visit the store.

Employers could take this one step further and communicate the measures they are taking via other mediums. Employers could consider having a staff member greet customers when entering the store and explaining the various steps the business has taken to protect customers and staff. If customers have signed up to mailing lists, consider emailing them details of the measures the business has put into place. Instruct staff to reach out to regular customers to obtain feedback and find out if they feel comfortable with what has been implemented.

Businesses should also consider other ways of encouraging customers to come into the store to show them it is safe and that adequate measures have been taken. Increasing a businesses use of click and collect is one way to do this as well as offering discounts for those shopping directly in the store.

If an employers’ business model relies heavily on customer consultations, consider if any of these can be done online. Building rapport with customers after this period of lockdown provides companies with an opportunity to discuss what health and safety measures they are taking, as well as highlighting any new products or services, directly with customers, which will likely put them at ease.  The offering of very personalised service in-store on a one to one basis (if sufficient safety measures could be put in place) would be another way of attracting a high quality of customer base as well as encouraging regular customers back, particularly in the luxury retail sector.

Get in touch...

If you would like to get in touch with our Employment team please call 02037973423 or email retailemployment@incegd.com. Alternatively, please complete the form below. 

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Authors:
Laura Livingstone, Partner, Head of Employment
Holly Freuchen, Associate
Returning to work

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