Furloughed workers and the post-pandemic world

Apr 29, 2020

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by ALEC COLSON Partner, Taylor Walton Solicitors

WHEN the history of the coronavirus is written, one of the words associated with the pandemic will be furlough. 

It is not a term usually associated with UK employment law, being a US federal government term used during federal government shutdowns to lay off workers, but as I write this column in late April 2020, millions of employees throughout the UK have agreed to take furlough leave through the government’s Coronavirus Job Retention Scheme at a cost to the taxpayer of £42 billion and rising. 

Alec Colson

Under the furlough scheme 80% of the employee’s wages are covered by the government up to a maximum of £2,500 a month on condition that the employee is not working. It is hoped that the scheme will protect jobs as the government deliberately reduces economic activity to reduce pressure on the NHS. 

Since the government announced the CJRS on 20 March 2020, employment lawyers have been grappling with the sparse details of the initial announcement and trying to fill in the gaps while additional details of the scheme have been drip-fed through a series of guidance notes on the GOV.UK website including a Treasury Direction to the HMRC which sets out the legal framework. 

The early guidance indicated that employees could be notified by their employer that they were a furlough worker. This was contradicted by the Treasury Direction which stated that the employee’s written agreement was required, followed by further guidance that the employee’s written agreement was not required. 

To be on the safe side, we advised clients to get written consent from employees to reduce the risk of future disputes.

The CRJS was originally intended to run until 31 May 2020 and has been subsequently extended until 30 June and may be extended further. However, the extension of the scheme provides time for employers to start to review their staff structures for the post-pandemic world when the CRJS comes to an end. 

This sadly means that redundancies are likely to be inevitable as the economy in many sectors will take time to recover. However, furlough employees remain subject to existing employment law and reducing the workforce by redundancy means that employers will still be required to comply with the law relating to redundancy.

This includes having meaningful consultation with staff, collective consultation with staff representatives where the employer is proposing to dismiss as redundant 20 or more employees at one establishment within a period of 90 days as well as considering alternative proposals to redundancy. 

These are important legal requirements and can be costly if the employer falls foul of the law.

The Taylor Walton employment team has already advised many businesses in relation to furlough leave and is able to assist your business during the forthcoming difficult months. 

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