Business as usual with furlough?
ALONG with Covid-19 and Coronavirus, Furlough is arguably the most frequently used word of recent times in the UK and elsewhere. It is without doubt going to be part of our regular lexicon from hereon. According to The New Shorter OED, 1993 (‘OED 1993’), the word (noun and verb) can be traced back to the early 17th?Century and, until widely used in the UK in relation to employment matters, largely due to the newly introduced Job Retention Scheme (‘JRS’), was primarily, “(A permit for) leave of absence, esp. as granted to a soldier, missionary etc”. After being reliably informed by an HR friend of mine who works for a multinational company that this term was used regularly in an employment context in the US pre-Coronavirus, I checked to see that it has been used there since late 18th?century as a verb, “Grant (a person) a furlough; give leave of absence to;” and late 19th?century, “spend a furlough” (OED, 1993). Like many, I have seen furlough (as a base word) used in many forms from the noun (Furlough?is) to the verb (we?shall?furlough?them/him/her) to the added suffixes ‘ed’ (as in has been, will be?furloughed), ‘ing’ (as in, we are furloughing?them/him/her) and more. I was even sent a copy of a question sent to the UK Chancellor by a well known person (of tv and radio) for whom I have the utmost professional respect, “Can you please publicly clarify that furloughing the vulnerable who must self-isolate for 12 wks, or those who can't work as they need to look after their children, doesn't breach the furlough rules?” I spent a mini-age wondering whether many of us even knew what the “furlough rules” were let alone would recognise whether they had been?breached! It is, therefore, of no surprise that we employment law and HR specialists have been inundated with numerous queries on what furlough means; who is doing the furloughing; what is the impact for both the employee (yes, one is?still?employed if furloughed) and the employer; and what happens when an employee is no longer furloughed. For example, are they guaranteed continued employment? Of course, to attempt to cover every point in detail – even if I were capable of doing so in these ever changing and fast evolving times – would result in a lengthy thesis.
First, it is?not?the Government who furloughs an employee. It is the employer. Secondly, an employee can be furloughed whether or not, as in the UK, a JRS (or similar) subsists or is in force. Thirdly, there may well be an express term in the contract of employment that deals with temporary lay-offs in exceptional times and the effect on wages. Therefore, as the JRS is designed to help those who?would otherwise have been made unemployed, it is debatable whether an affected employee who has been temporarily laid off pursuant to the terms of their contract, which allows for such action in exceptional times, can rightly be described as being?about to be made unemployed. For example, if an employee had been temporarily laid off before JRS was introduced with the intention, naturally, of returning to work after an agreed period or following the exceptional circumstance(s), clearly they were not going to be?permanently?laid off. In fact, it is questionable whether the term?unemployed?is used appropriately in this case (see FAQs on JRS – Q: Why are you not supporting me if my hours are reduced? A: The [JRS] is designed to help those who otherwise would have been made unemployed). For example, for the purpose of this discussion, what determines whether the person is unemployed is whether or not they are working (employed or not) not whether they have been made redundant?solely?by Employer X i.e. the said redundant former employee of Employer X may have a second job with Employer Y or have secured other employment with Employer Z, but that is a side issue and moot point in the grand scale of things.?Furthermore, notwithstanding the last, the HMRC Guidance, 9 April 2020, (‘HMRC Guidance’) appears to go wider with, "Employees who are unable to work because they have caring responsibilities resulting from coronavirus (COVID-19) can be furloughed. For example, employees that need to look after children can be furloughed."
An employer has a common law duty to provide work to its employees. Of course, not all contracts will necessarily have an express term, dealing with lay-offs and wages in the event that a temporary lay-off is deemed necessary by the employer. Therefore, and in any event, “Employers should discuss with their staff and make any changes to the employment contract by agreement.” It is important to note that if an employee is working from home then they are?still?working. As the HMRC Guidance states, clearly, with regards to the JRS, an employer, “can choose to top up your employee’s salary, but you do not have to. Employees must not work or provide any services for the business while furloughed, even if they receive a top-up salary.”?Note, also, “If your employer chooses to place you on furlough, you will need to remain on furlough for a minimum of 3 consecutive weeks. However, your employer can place you on furlough more than once, and one period can follow straight after an existing furlough period, while the scheme is open. The scheme will be open for at least 3 months,” (HMRC Guidance).
Also, as stated in the HMRC Guidance, “When employers are making decisions in relation to the process, including deciding who to offer furlough to, equality and discrimination laws will apply in the usual way.” Naturally, against the background of the JRS and a chance to retain one’s job to be furloughed this is a plus. But, it is still unlawful to furlough for an employee if they have been selected because of their protected characteristic(s). I would add to that that other laws apply also. For example, a detriment suffered because an employee ‘whistleblew.’ Remember, under the JRS is there to ‘prevent’ affected employees from being made redundant. Therefore, if some employees are selected to be furloughed and some not then, although the affected employee has retained their job for a period, the question still remains that?but for?the JRS that employee would have been made redundant whilst an employee who might otherwise (or should) have been in the redundancy pool in?ordinary times?had there been a redundancy?situation is ‘kept on’ (i.e. not furloughed) so to speak.?
Finally, I asked,?what happens when an employee is no longer furloughed? Of course, it is anyone’s guess how soon the economy will recover or how different our working practices will be post-Coronavirus. Notably, as stated in the HMRC Guidance, “Your employer can still make you redundant while you’re on furlough or afterwards.”?Is the person who had not been furloughed and who is deemed to have helped kept the company ship to stay afloat whilst another was ‘on furlough’ in the better or worse position if the company post-JRS (and, therefore, no more Government 80% of wages/maximum ￡2,500 assistance) and, due to, for example, a slow economic recovery etc, redundancies are being considered? I leave that for you to debate.?
In conclusion, as odd as it may appear at first glance to ask in these unprecedented times, is it business-as-usual, the “equality and discrimination laws will apply in the usual way,” so does the other laws, affecting an employment relationship. As?confirmed in the HMRC Guidance, “Your rights as an employee are not affected by being on furlough, including redundancy rights.” Likewise, internally, a?grievance can still be raised and would need to be dealt with and or a complaint can still be presented to an employment tribunal, which would still need to be done and responded to within and or by the current stipulated time limits. All decisions by the employer in relation to furlough must?still?be within the band of reasonable responses. Covid-19, Coronavirus and Furlough have not changed any of these.??
Is it business as usual? Well, as far as Good HR Practices and (pre-existing) Employment Laws are concerned, the former are?essential?as always and the latter?still?stand.
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Keep well. Keep safe.
"The Administrators’ difficulties arise because although the Scheme has been explained?by the Government in broad terms in guidance published online, there has been no precise detail given of its legal structure, and specifically how the Scheme is intended to operate consistently with the insolvency legislation." Mr. Justice Snowden
Ryan Clement, LL.M., B.A., B.Sc., barrister specialises in, amongst other areas, Employment Law and Human Resource Management
#Ukemplaw #EmploymentLaw #Discrimination #EqualityAct #Law #Legal #Training #Covid-19 #Coronavirus #Furlough #jobretentionscheme
? Ryan Clement 2020
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4 年As always a clear and concise pathway through a myriad of archaic language and complex rules. Thank you for sharing Ryan - so useful and particularly for those most vulnerable who are at the mercy of employers who themselves may not have the clarity of their thought nor the depth of understanding as you have facilitated through this article, great stuff!