The law is constantly changing and the position set out in this paper may not be current. You should not rely on this or other ELA papers as a comprehensive statement of the law but should always seek advice if you require it from a qualified lawyer. ELA does not give legal advice.
Introduction
The Employment Lawyers Association’s ("ELA") Legislative and Policy Committee has set up a standing working party to respond and make recommendations on measures relevant to employment law during the current coronavirus crisis.
ELA is a non-political group of specialists in the field of employment law and includes those who represent claimants and respondents in courts and employment tribunals. It is not ELA's role to comment on the political or policy merits or otherwise of proposed legislation or regulation, rather it is to make observations from a legal standpoint. ELA's Legislative and Policy Committee consists of experienced solicitors and barristers who meet regularly for a number of purposes including to consider and respond to proposed legislation and regulations.
A sub group of the working party has prepared the paper below to consider employment law issues relating to the Government Job Retention Scheme. The sub group members are as follows and the full ELA Working Party is listed at the end of this paper.
Howard Hymanson, Harbottle & Lewis
David Widdowson, Abbiss Cadre
In his announcement on 29 May 2020 the Chancellor outlined a number of changes to the Coronavirus Job Retention Scheme. ELA’s Covid-19 Working Party has a number of comments to make concerning these changes and how they might be implemented in what presumably will be a further Treasury Direction.
1. Rotating employees
When the Scheme was announced by the government on 20 March 2020, perhaps few people would have predicted that it would remain open until the end of October 2020 or that as many as 8.7 million employees would be furloughed.
The extent to which a fair selection procedure has been adopted by employers furloughing employees, has varied greatly. In many instances the severity and immediacy of the anticipated financial downturn, has driven the implementation of a limited selection procedure, the application of which has been broadly accepted by those employees who have consented to being furloughed, many of whom may have been relieved to have been spared their employment being terminated in the short term on the grounds of redundancy.
In order be compliant, employees must be furloughed for a minimum of three weeks and the HMRC Guidance clarifies that employees “can be furloughed multiple times”. Whilst some employers who had scope to rotate employees off furlough, may have chosen to do so, most employers are likely to have been disinclined to implement a policy of rotation. Their intransigence may reflect a level of apathy on their part, or perhaps in other cases, a conscious or unconscious belief that those employees who have not been placed on furlough are more productive. This may in part be a reflection of the main reason why those employees were not selected to be furloughed in the first instance.
It will now be too late (due to the fact that the scheme will close to anyone who hasn’t been furloughed for 3 weeks by 30 June) to seek to place on furlough an employee who has not yet been furloughed.
A concern for employees who have been on long term furlough, is that in practice they may as a consequence be at greater risk of being made redundant.
We consider with this in mind, that it would be helpful in the forthcoming Guidance to be published on flexible furloughing from 1 July 2020, if encouragement could be provided to employers, where it is reasonably practicable to do so, that they do provide some work to those employees on furlough to undertake and/or actively consider rotating employees off furlough. We consider that this will be important as long periods without providing active service at work, will place furloughed employees at a practical disadvantage. By both increasing the risk that they may be selected for redundancy and also making it more difficult for them to secure work in the open job market, when it comes to seeking new employment opportunities.
2. Working reduced hours
It is proposed that, as from 1 July 2020, furloughed employees would be able to return part or on reduced hours with their employer being responsible for paying them for those hours. Until now it has been a condition of the Scheme that employees do no work at all for their employer.
It would be very helpful if, in the next Treasury Direction, it were made clear
a) Whether there is any minimum number of hours required?
b) What contribution may remain available to be claimed from the Government? Presumably it will be for the difference between hours actually worked and 80% of contractual hours (decreasing to 70% then to 60%)?
c) Whether claims may be made for employees currently working on reduced hours.
Members of ELA Covid-19 Working Party
Co-chairs: Paul McFarlane, Capsticks; Kiran Daurka, Leigh Day
Shubha Banerjee, Leigh Day
Emma Burrows, Trowers & Hamlins
Sarah Chilton, CM Murray
Shantha David, Unison
Peter Edwards, Devereux Chambers
Clare Fletcher, Slaughter & May
Beth Hale, CM Murray
Howard Hymanson, Harbottle & Lewis
Nadia Motraghi, Old Square Chambers
Louise Skinner, Louise Skinner, Morgan Lewis & Bockius UK
Catrina Smith, Norton Rose Fulbright
Caroline Stroud, Freshfields Bruckhaus Deringer
David Widdowson, Abbiss Cadres