The future of retail - what changes will employers in the retail sector have to make in a post-pandemic world

A version of this article was being drafted in late February/early March, looking at issues such as the new requirements for employment contracts, IR35 and the impact of Brexit, however in a short few weeks, the world changed. 

The retail sector is likely to be one of the sectors most affected by the Covid-19 pandemic.  Whilst some retailers, particularly supermarkets, saw significant increases in sales, others were forced to shut their doors.  Whilst some have been able to continue trading online, the impact of Covid-19 is likely to be felt for years to come and we already know several names that won’t be returning to the high street when it re-opens.  Even once Government restrictions are lifted, the ability to re-open is likely to depend on a number of factors and the way retailers manage their stores, and their staff, is likely to change significantly. 

Changes to working patterns

Following the Prime Minister’s speech on 10 May and the subsequent publication of detailed guidance on 11 May, we now know that non-essential retail outlets may be able to re-open from the start of June. The Government has published guidance for retailers which gives us some idea as to the types of restrictions that might be applied.  

The Government guidance which can be seen here makes it clear that health and safety will be of utmost importance.  The Health & Safety Executive will have broad enforcement powers.   All businesses will be required to conduct risk assessments and businesses with other 50 employees are expected to publish them on their website.

As stores do re-open, the types of issues HR will have to deal with are likely to change significantly and the following tasks are all likely to become part of the ‘new normal’ for HR:

• consulting with staff on health and safety risks and providing clear guidance and training;
• ensuring staff have appropriate PPE
• ensuring staff can maintain social distancing (the Government guidance contains details as to how this might be achieved in a retail setting including reducing meetings, staggering breaks, altering store and warehouse layouts and/or introducing one way systems and floor markings to manage movement around premises)
• fixing teams and shift patterns so these groups remain stable; and, most importantly
• ensuring staff do not attend work if they are showing symptoms

Another challenge HR may face, particularly in a customer facing setting, is persuading staff to actually come to work.  As and when stores re-open, there will be inevitable concerns about safety and persuading staff that they will be safe in the workplace is likely to form a big part of the initial work performed by HR.

With talk of ‘track, trace and isolate’ forming a key part of the Government’s post-lockdown strategy, HR will need to be agile.  If an employee starts to show symptoms, or records on his/her NHS ‘app’ that they have done so, entire teams could have to immediately self-isolate.  In a smaller store, this could mean the majority of the staff immediately having to self-isolate for 7 to 14 days.   Conversely, HR will have to be vigilant to the ‘virtual sickie’; ie a member of staff falsely claiming to have been notified of a need to self-isolate so they can take a week or two off. 

The types of roles will have changed as well, all stores are likely to now require security guards to manage numbers entering the store and the supermarkets have already employed an army of new delivery drivers to help meet demand.  As retailers become yet more reliant on online trading, warehouse pickers and other logistics staff may soon outnumber shop-floor based staff.  

Working patterns are likely to change too, with talk of office workers being required to work shifts to reduce numbers of staff in offices and using public transport at any one time. How will office workers adapt to working in shifts? Or can those staff become home-based, and how will that impact on the role of HR? How can HR ensure those staff are being managed properly? Similarly, will back office support for store based staff suffer if those functions become home, or shift, based?

Reduction in staff numbers

Sadly, the ‘R’ word is likely to become inevitable for many retailers.  Commentators are already nervously looking ahead to what will happen when the furlough period introduced by the Coronavirus Job Retention Scheme (“CJRS”) ends.  Yesterday’s announcement that the CJRS will be extended until the end of October, albeit with some modifications (see our update here) will be a relief to many although it may well exacerbate the challenge described above in respect of employees’ willingness to attend work. 

Ultimately though, redundancies are likely as even stores that do re-open are likely to see lower footfall and therefore need less staff. This will raise all sorts of questions around collective consultation, selection criteria and the overlap between redundancy processes and furlough. 

Managing collective and individual consultation whilst staff are working from home or furloughed will present practical and legal challenges.  Whilst many retailers recognise trade unions, those that don’t will need to consider how to organise the election of employee representatives when the majority of staff are not regularly attending the workplace – and may be resistant to doing so, even just to cast a vote. 

A number of employers are asking whether engaging in a consultation exercise, particularly for elected representatives, would amount to ‘work’ and therefore be prohibited under the rules of the CJRS.  The most recent Government guidance on the CJRS has confirmed that this would not be the case. 

Other employers are asking whether making redundancies whilst the CJRS is still running is legally or morally questionable.  Again, the answer is probably not but employers will need to demonstrate that they have considered all available alternatives to redundancies, which may well include furloughing staff and keeping them furloughed for as long as the scheme permits before effecting any dismissals. 

Changes to terms and conditions

As well as the obvious ‘belt tightening’ that many retailers are likely to have to engage in, changes to overtime pay, staff discount schemes and the reduction or removal of other benefits for example, employment contracts in the post-pandemic world may well have some unusual clauses.  Examples might include regular, mandatory tests, mandatory use of the NHS track and trace app, a contractual prohibition on attending work if symptomatic, and changes to sick pay entitlement to discourage symptomatic or vulnerable staff from attending work. 

As with any contractual changes, the more controversial the change the more complex the process will be.  Unions and other representative bodies will need to be consulted, data protection implications will need to be considered and, in extreme circumstances, the collective consultation obligations may be triggered, resulting in similar considerations to those outlined above. 

All in all, it is likely to be a busy time for HR professionals in the retail sector.