13th March 2022
Reservists – What every employer needs to know
After two years of huge uncertainty, with COVID-19 bringing normal life to a grinding halt for longer than any of us could imagine, the beginning of 2022 brought with it an optimism that this year would finally allow us to return to the simple activities that we had once taken for granted.
I am, therefore, struggling to get my head around the fact that, far from returning to normal, there is now war in Europe and I am starting to receive questions from payroll practitioners about their obligations towards employees who may be UK or non-UK military Reservists. How can this be a reality in 2022? Nevertheless, it is a reality so I thought I should provide a little information in this blog.
I must make clear from the outset that I am not an employment lawyer, and my overarching advice to any employer in this situation would be to seek professional legal advice. That being said, here’s a starting point.
What is a Reservist?
There are two main types of Reservist:
- Volunteer Reservists are civilians recruited into the Royal Naval Reserves, Royal Marines Reserves, Territorial Army and Royal Auxiliary Air Force.
- Regular reservists are ex-regular servicemen who may retain a liability to be mobilised depending on how long they have served in the Armed Forces.
Reservists make up a significant element of the nation’s total defence capacity and are called upon as individuals for their specialist skills or as ready formed units when required. They receive the same training and develop the same skills as their regular counterparts, which means they can carry out the same roles to the same high standards.
Although the UK is not currently playing an active role in the conflict in Ukraine, employers are now beginning to wonder what implications there may be for them and any Reservists that they employ.
Mobilisation is the process that occurs when Reservists are called up. Reservists may be mobilised for anything from a few days up to a maximum of 12 months. The mobilisation period includes pre-deployment training, deployment itself and any post-operational and accrued leave.
Wherever possible employers and their Reservist employees will be given at least 28 days’ notice for contingency (short notice) operations and at least 90 days for pre-planned operations. Both the employee and the Reservist employee will receive a call-out notice containing key information, including the call-out date, expected duration and details of how to claim financial assistance or appeal against call-out.
Impact on payroll
The MoD will assume responsibility for the Reservist’s salary for the duration of their mobilisation. They will pay a basic salary according to the Reservist’s military rank. If this basic element is less than the Reservist receives from their usual employment, it is the Reservist’s responsibility to apply to the MoD for the difference to ensure that they suffer no loss of earnings. This is known as Financial Assistance and the Awards to Reservists.
Although the employer does not need to pay the Reservist employee whilst they are mobilised, it does not constitute a break in service. It is important that payroll:
- Does not issue a P45
- Notes the records that the employee is on unpaid special leave
- Is aware that any period of mobilisation does not count towards reckonable service periods
The employer may suspend contractual benefits during mobilisation, though these can be claimed back by the Reservist from the Ministry of Defence (MoD) as part of their Reservist Award. Example benefits include:
- Health insurance
- Life insurance
- Company car
If the Reservist is a member of the company’s pension scheme, and chooses to remain in it, under the Financial Assistance regulations, if the employer suspends or withdraws their employer contributions then the MoD will make the employer contributions for the period of mobilisation, as long as the Reservist continues to make their personal contributions.
See payroll guidelines on Reservists: https://www.gov.uk/employee-reservist
During the period of mobilisation the MoD will provide Financial Assistance to members of the reserve forces and their employers who suffer financial loss as a direct result of the call out.
For the employer these include:
- Overtime costs, if other employees work overtime to cover the work of the Reservist
- Costs of temporary replacement by the amount that such costs exceed the relevant earnings of the Reservists
The maximum claim available is £110 per day (approx. £40,000 per annum). Claims can be made for every normal working day that the Reservist is away on permanent service.
Non-recurring (One-off) costs:
- Agency fees, if a recruitment agency or employment agency is used to find a temporary replacement; or
- Advertising costs
There is no financial cap on the above claims, but any claim must be supported by relevant documentation
An application for non-recurring (one-off) costs and recurring costs must be made within four weeks of the end of mobilised service.
More Financial Assistance is available to employees and their Reservist employees, you can find information on this link Employers_Handbook-APR2015.docx (live.com)
Returning to work
A Reservist has the right to be re-employed in the type of job in which they were last employed and on terms and conditions no less favourable to that previously.
The specific arrangements for individuals who are called up to the UK reserved armed forces do not apply to nationals of other countries being called up for military service by their home country. That being said, it could put both the employer and their employee in a difficult position if an employee called up by their home country is under a legal obligation to join the armed forces.
There is no obligation on an employer under UK law to release employees in this situation, or to keep their employment open. It is also very unlikely that any rules applying to overseas military and employment would be binding on a UK employer. But employers may want to support their employee, and employers will therefore have to decide whether to treat non-UK nationals in the same way as they would UK nationals in a similar situation. There will undoubtedly also be non-Reservist employees, perhaps Ukraine nationals, who feel compelled to join the Ukrainian armed forces voluntarily.
Essentially the position is the same whether they are Reservists or not. Employers may decide to keep the employee’s job open, either because the employee plays a vital role in the company, or simply because the employer wants to support the employee, in effect treating them as they would UK nationals being called up. This arrangement should be confirmed in writing.
However, as there is no legal obligation to keep the employment open, the employer could refuse permission for an employee to go. The employee may resign or, if they simply leave, the employer could take steps to dismiss the employee, though the employer would still need to follow a fair process to reduce the risk of unfair dismissal claims.
In these unprecedented times (has that phrase ever been used so much as in these last two years?) it would be wise for employers to check if they have a Reservists policy. If not, now might be the time to create one, and when doing so, decide whether it will only apply to UK Reservists, whether it will also apply to non-UK Reservists, or whether it will encompass all employees who feel compelled to volunteer to join their country’s armed forces.