Coronavirus Job Retention Scheme Update

Extension Confirmed & Three Key Questions Answered!

At the start of April, I provided a note on the Job Retention Scheme/Furloughing, which still, by and large, holds true (albeit Guidance has since been adjusted, in certain areas). However, with Scotland looking set to remain in some form of “lockdown”, till at least the very end of May, I thought now was a good time to focus on three areas where there still may be some uncertainty. The focus, as you will see, has been on three key questions, which have been causing an element of confusion! These concern the thorny question of holidays, other bases for furloughing (including “shielding”) and the delicate question of when any redundancies might take place.

Additionally, the UK Chancellor has announced an overall 4 month extension to the Scheme, until the end of October. However, the Scheme will only remain in its current form, until the end of July (a one month extension therefore, to the current operation) and will then be adjusted to make it possible for staff to return (for example) part-time. Further detail is awaited, later this month, but the intention is that the employer and the government would then share in the cost of wages/salaries.

Question 1: Can I put Staff on Holiday, While on Furlough Leave?

We are now a bit further forward, on this question, as newer Guidance has confirmed that employees can elect to take holidays while on Furlough Leave. Although not expressly dealt with, it would also seem that this will not interrupt the period of Furlough – it having already been clear that staff would continue to accrue holidays, whilst on Furlough Leave (subject to possible exceptions, for certain types of zero-hours staff).

However, the question many businesses have been waiting for an answer to, is whether employers can (unilaterally, if they wish) allocate holiday days to staff. This would ordinarily be possible, provided at least twice as much notice, as the number of days being allocated, is given. It having already been clear that previously scheduled bank holidays (and any other already designated days e.g; “shutdown” days, or days already elected by the employee) were suitable holidays.

Very recently, Guidance has been updated to confirm that employers can require employees to take holiday during furlough. Employers are though encouraged to first engage with their workforce, prior to doing this, and explain why this is felt required. Employers should also take account of any restrictions though, such as the need to socially distance or self-isolate, in considering whether staff can properly rest/relax, during such days.

My Verdict:

This Guidance is very much welcomed, by clearly stating that employers can allocate/require staff to take holiday during Furlough. In terms of engaging with staff, my view would be that explaining the reasons (perhaps within correspondence) would likely be sufficient, even if this was done slightly “assumptively”. I would not generally suggest that express written agreement is necessary (in response), although the tone/phraseology of any letter should be carefully considered. Importantly, employers who choose to impose holidays should act reasonably (and proportionately) – or, at least, not unreasonably – when doing so. You also, in light of this being fairly unchartered territory for all, should be very sensitive to anything which could be construed as staff objection/resistance following on. In that event, and particularly if you were inclined to seek to “push through” the holidays anyway, legal advice would certainly be recommended. This would be particularly the case for any (for example) “shielding” staff, who may not benefit from any slightly eased restrictions, and a less assumptive dialogue with such staff – surrounding holidays – would likely be a better approach.

Overall though, if this is something your business has been considering (e.g; because you are concerned about an increasing liability, or about staff having a disproportionate amount of days holiday left upon their return), then now would seem the best time to move this forward. Payment would, of course, require to be “topped” up (to 100%), and there may also be related questions surrounding appropriate calculation method etc. It is also worth noting that, if you would (ideally) like to avoid allocating days in this way, you could instead seek to rely on new provisions allowing, those unable to take holiday (due to the pandemic), up to 4 weeks of “carry over” into the next holiday year.

Question 2: What if our business was not intending on relying on the Scheme, either for specific staff or more generally?

The majority of businesses have, of course, been impacted by the ongoing pandemic (in whatever way and to whatever extent). For those businesses, staff will likely have been placed on Furlough, with the appropriate notification/agreement etc, as a result. However, there are many businesses which may still be operating at nearly full capacity, perhaps because staff are deemed “essential” workers or because (appropriate workflows permitting) businesses have been able to set them up to work from home. If a business doesn’t want to furlough staff though, either specifically or more generally, do they need to pay much attention to the Scheme right now?! My answer to this is yes, under certain circumstances.

The best example of where a business should be mindful of this, is where someone is an extremely vulnerable (or very high risk) and is therefore required to “shield”. The Guidance effectively confirming that they can be furloughed, even if they otherwise would have remained working, although you would be entitled not to seriously consider/proceed with this option (if it is clear they can work from home). If seeking to rely on furlough, for this reason though, you should be very careful to consult the appropriate list of qualifying medical conditions and, if any doubt arises, let your adviser know. You should also try to obtain a copy of the actual government letter, confirming the person requires to “shield” for 12 weeks. If this is not possible, because (for example) the person did not receive it, you should otherwise see clear cut medical evidence and cross reference this with the relevant list. While your claim, in respect of that person, will likely not require such evidence to be provided along-with, you would be best keeping this for any future HMRC inspection. When processing any health information about your staff, there are data privacy obligations, on which you may also wish to seek legal advice.

Another, not necessarily known about, circumstance where someone can be furloughed, where a business otherwise may not have been considering Furlough, is where there are child-care commitments arising from the pandemic. This might be related to school closures, and perhaps where other “back-up” child-care (including grandparents) is not currently possible.

My Verdict:

It’s important to note that the “shielding” medical conditions are not as extensive as some people might feel they should be. For example, asthma is only covered if it is sufficiently serious/chronic and pregnant persons are not on this extremely vulnerable (very high risk) list and are, instead, only considered vulnerable (high risk). A pregnant person, for example, would only seem to qualify for furloughing (on this specific basis), if they also have a significant heart problem. I should stress though, that these other bases for Furlough, only really become relevant where businesses are not otherwise furloughing staff, and cannot simply articulate the same/similar reasons to all staff.

This area has caused a great deal of confusion, and I would suggest being very careful, when considering utilising the Scheme – including upon receipt of any requests by staff – on the basis of shielding (alone). If someone can evidence that they are in a shielding category though, you would be taking a very big legal risk (including under Equality Act and for health and safety reasons), by denying any related request. Although you are entitled, of course, to consider the question of home working and put that to them. I would also suggest you are satisfied, and keep an appropriate record, that the person is in an appropriate “shielding” category (e.g; in case of any future inspection).

It might be, of course, that someone is suggesting they are in the extremely vulnerable (very high risk) category but is unable to satisfy you that they are. This may well be grounds to refuse Furlough, and potentially also keep them in their normal workplace. However, advice is highly recommended here, as (for example) Equality Act and health and safety considerations may well still be at play.

At this time, evidence behind required “child-care” Furlough would not seem as necessary though, at least while schools remain closed and there are clear difficulties with any alternative arrangements. Similarly though, if you were to deny “child-care” Furlough, to a member of staff (and home working would seem potentially harder for you to justify here), you would again be taking clear risks under Equality Act legislation. In both cases though, and where you perhaps don’t think you can rely on a more generalised basis for Furlough (e.g; because you are concerned about any later argued abuse or because you do not want to set a precedent for other staff), I would suggest articulating the reasons for furlough within any notification/agreement.

Additionally, and as a side note, it’s very important to say that additional obligations exist for pregnant staff, surrounding health and safety at work (including specific risk assessments) and advice is highly recommended here.

Question 3: If I think Redundancies might still be necessary, when should I start thinking about this?

My overall answer to this question is the sooner businesses can get a formal idea of what may be required, if this is a possibility, the better. Collective consultation requirements exist, for those who may require to make 20-99 redundancies (within a ninety day period) and there needs to be a minimum 30 day consultation period. However, while this may not affect the majority of businesses, consultation periods will still likely require to be at least 2-3 weeks in length. Needless to say, the latest announcement (surrounding the extension of the Scheme), will likely have a bearing, but businesses should be careful not to allow this issue to be put too far down the list of priorities.

Interestingly, the government Guidance has made it clear that redundancies can still take place, during a period of Furlough, and furthermore there also appears nothing (even after recent announcements) prohibiting businesses making successful reimbursement claims, for the period of any associated notice!

For businesses, where more drastic measures (such as closure) are legitimately being considered, there could well be grounds to move forward with relevant consultations, provided that such a proposal could be said to be reasonably justifiable (even while keeping in mind the further extension to the Scheme). Business closures are treated in much the same way though, in law, as more limited redundancy exercises and still therefore require (for example) a sound business/financial rationale and proper consideration of alternatives. The timing of even a business closure, is likely to be subject to a high degree of scrutiny, while the Scheme (and possibly to include other forms of assistance) remain accessible. Such an exercise would also still require a form of consultation to take place, whether on an individual or collective basis (depending on the numbers involved). This should not be dispensed with, simply because closure may be involved, or on the basis that face to face meetings (even at 2 metres distance) would still not seem appropriate.

In terms of possible redundancies, to include where the business is to continue (and assuming collective consultation requirements are not triggered), the overall reasonableness of any dismissal – particularly now the Scheme remains open for longer – will also likely be subject to a high degree of scrutiny. So, while it is still theoretically possible to make redundancies (and the Guidance appears to expressly allow for this), the onus will very much be on the business to explain why redundancies are required, at any specific point. Such explanations will not only need to be presented to the employee(s), during any consultation, but also before any Employment Tribunal (if required). Much may therefore depend on the broader costs involved, in keeping the business running and (for example) how significantly turnover has been affected, if more immediate redundancies (to include workplace closures) are being considered.

My Verdict:

While the existence of the Scheme is likely to give clear arguments as to why it would not be reasonable to make redundancies, at least at this time, much will depend on the specific financial situation facing each business. Even if your business might not be contemplating making 20 or more redundancies, the earlier you can speak with a specialist adviser, to discuss any possible action you may wish to take, the smoother the process is likely to be, when the time (unfortunately) may come to move such process on. Redundancy being a highly legally sensitive area, with many potential pitfalls, specialist advice is always recommended.

Please note that the above should not be taken as legal advice but is meant as a helpful note on certain questions surrounding the Scheme. It is also based on matters, as they stand (at the middle of May), and the overall situation remains fluid.

If your business would like to discuss anything, related to the above (or otherwise), concerning staffing matters, please feel free to contact Euan for a no obligation chat. It may be we can consider your business for our monthly retainer, though eligibility and payment level/term may depend on the work involved in an initial instruction. Euan can be contacted on 07741908566 or euan.smith@macandmac.co.uk.

May 19, 2020