COVID 19 – Latest Update

Supporting our Members through COVID 19 – UPDATE 4

It has been an incredibly busy time at AIM as the team work through all of the enquiries that have arisen from our Members.  We appreciate that some of you may have been waiting patiently for answers to your questions and are thankful for your understanding.  The AIM team may be small in number, however it is a dedicated one and we are doing our very best to respond to each of you as soon as we can.

If you have a query regarding your cover please send us an email in the first instance to [email protected] – stating your Business Name and your Renewal Date in any correspondence, as this will help us to work through the enquiries as effectively as possible.  Those with an imminent renewal date will be handled as a priority.

We hope that the offer of the payment holiday has been well received and helped those who have taken this up.

Other News – Helplines

AIM have been working with ARAG to provide Legal Expenses cover to all AIM Members at a very competitive cost. ARAG are a leading legal expenses provider offering an extensive range of legal insurance and assistance products and services. The launch of this has been delayed due to the recent Covid-19 outbreak and downturn in business activity, however ARAG have confirmed that they would be happy for AIM Members to have access to and utilise the following services in the meantime:-

Telephone helplines

Legal advice on business matters within UK and EU law:  0344 571 7978

Redundancy assistance, 9am to 5pm weekdays: 0330 303 1955

UK tax advice, 9am to 5pm weekdays: 0344 571 7978

Counselling service: 0333 000 2082

Examples where ARAG might be able to help are:-

  • Advice and support on employment rights and obligations such as statutory sick pay and duty of care
  • Advice and support on debt issues
  • Counselling Assistance – this provides professional counselling services by phone and is available to workers and employees suffering stress or anxiety due to disruption caused to their daily routines or distress caused as a result of the virus.
  • Professional public relations expertise to protect your reputation following adverse publicity that has arisen as a consequence of the Covid-19 outbreak that affects your business reputation.

We understand that you simply need to state you are a member of the Activities Industry Mutual when calling..  Please do let us know your feedback should you take advantage of the service on offer.

Government Support for Business

The Government announced that the Furlough Scheme cut-off date has been extended to 19 March 2020.  Employers can claim for furloughed employees who were employed and on their PAYE payroll on or before 19 March 2020.  If you believe you are eligible for support you can access the link here:

 Cover Availability

It has been reported that another provider of activity insurance has exited the market, leaving many activity providers without cover once they reach their renewal date.  We want to reassure members that AIM has always maintained a rigorous risk-assessment criteria when assessing new applications. It is this attention to detail and high standards which means that we can offer value, security and continuity of cover no matter how volatile the economy.

 Ofcom – Scam Texts and Calls

 We have been notified of the following Scam Texts and Calls which you may like to make yourself aware of:-

Member Profiles

Each month we produce a Member Profile to promote on our website and social media. It would be great to hear from Members if you would like to be profiled, examples of these can be found in the News section of our website. Please email [email protected]

Please join our closed Facebook group

Or follow us on LinkedIn



Employee ‘furlough’ scheme

On 20 March, the UK Government announced a series of wide-ranging measures to assist businesses and employees through the COVID-19 crisis, including a Coronavirus Job Retention Scheme (the “Scheme”) (see the Chancellor’s speech here). Whilst details of the Scheme are sparse at this stage, we set out below answers to key questions our clients are asking about the Scheme:

1. What is the Scheme?

In brief, employers will be able to contact HMRC for a grant to cover 80% of the wages (up to a total of £2,500 per month) of employees who are not working but are “furloughed” and kept on payroll, rather than being dismissed. The Scheme is available to any employer in the country – small or large, charitable or non-profit.

It is not clear what is meant by “wages” in this context – whether it is just “basic pay” or includes allowances and bonuses paid in a prior reference period. Nor whether it includes employer pension and national insurance contributions. We understand further guidance will be issued shortly.

2. When will it apply?

The Government has announced that the Scheme will cover backdated wages from 1 March 2020, although it is likely to be some weeks before the payments are actually made under it.

3. How does an employer apply?

The details of application for the Scheme have not been announced yet as it is still being set up. We understand that an online portal is being set up for employers to notify HMRC and apply for the grant after the relevant employees have been notified that they are to be treated as furloughed.

4. What is a furloughed employee?

“Furlough leave” or “furloughed employee” are not familiar concepts under UK employment law. However, in this context, a furloughed employee is someone who rather than being dismissed for redundancy by their employer, is kept on the payroll during a period where the employer does not have any work for the employee.

Workers and self-employed individuals (independent contractors) are not covered by the Scheme. It is only intended to cover employees registered for PAYE purposes.

It does not apply to employees who have already been dismissed or made redundant – the Scheme is designed to reward employers who keep their employees on the books during the COVID-19 crisis by offering a significant wage subsidy.

Further, it does not appear to extend to:

  • subsidising wages where shorter hours or reduced pay have been negotiated in response to the COVID-19 crisis; nor
  • employees on sick leave or in isolation.

5. Does the Scheme create a legal right to place employees on furlough leave?

No, the Government has been clear that this announcement does not create a legal right to place employees on furlough leave. An employee’s status will be subject to employment law, and what is set out in their contract of employment.

Some employers may have what is called a lay-off clause in their contract, which allows them to send employees home without pay for a limited period, or they may have a practice of operating such an arrangement so that there is an implied contractual right to do it. This is rare however and most employers do not have the contractual right to lay staff off without pay. The position for them is that if they send employees home because there is insufficient work then those employees should continue to be paid. If they are not paid or there is no contractual right to send them home in the absence of work, then the employer could face claims for the unpaid wages (in the form of breach of contract or unlawful deduction from wages claims) and potentially constructive dismissal claims.

The Scheme is designed to cover both scenarios:

  • where an employer has a lay-off clause, the Scheme will see employees receive 80% of their salary (up to the £2,500 monthly cap) as opposed to the zero pay they would otherwise be entitled to; and
  • where there is no lay-off clause, the Scheme will see Government contribute the same amount towards the employers’ contractual obligation to pay staff their wages during a period of no work.

6. Do employers need consent to place employees on furlough leave and are they obliged to pay the shortfall in wages above the Government contribution?

If an employer does not have a contractual right to enforce temporary leave then it will need consent to place an employee on furlough leave. If an employer unilaterally places an employee on furlough leave, it runs the risk of a constructive dismissal claim, although in current circumstances, the risk of such a claim would appear low, particularly when the alternative for employees is likely to be the loss of their job entirely.

More significantly perhaps is the position regarding the pay due to the employee in excess of the Government contribution. Unless an employer has the right to reduce pay during a period of temporary leave, then it will be obliged to make up any shortfall and continue benefits during any period of furlough, unless employees agree to reduced pay (perhaps to avoid a risk that the employer has to make redundancies)

Article Credit: Mayer Brown