With lots of uncertainty surrounding the current situation, and employers being bombarded by questions from their employees (as well as having their own), the Law Society has published a guidance, explaining some of the more uncertain aspects of the scheme and could be useful if you are considering putting employees on furlough leave.
It is unsurprising that there are still some uncertainties with the scheme, as it was created in such a short space of time. Below we have summarised the main questions we have seen come in from employers and employees alike and tried our best to answer them, using the Law Society guidance.
Should there be a written agreement from furloughed employees in place?
From the view of employment law, this may not be necessary, and it may not even be necessary to gain the agreement of the employees furloughed at all. If a business has agreed to top up the grant so that the employees continue to receive 100% of their salary, consent may not be necessary at all, as workers generally have the right to be paid, not the right to be at work.
What is unclear is whether the agreement of the employee is required in order to qualify for the government scheme. The guidance provided by the government on how to make a claim does not include the need for such an agreement, however HM Treasury has stated that a written agreement is necessary, although what this means in practice is not clear.
As always, the safest way to proceed would be to get something in writing, i.e. written consent from an employee (even if not needed in the end) and this can be done retrospectively if needed.
Can employees on furlough volunteer or take part in training?
The straightforward answer is, yes. That is, as long as they are not providing a service for their employer.
The government has insisted that it does not wish to subsidise work, but at the same time, it does not want to deny opportunities such as training and volunteering for those who are on furlough leave.
Businesses and organisations are allowed to provide these opportunities as long as the activity “…does not provide services to or generate revenue for, or on behalf of your organisation or a linked or associated organisation”.
What remains uncertain is where HMRC will draw this line. The safest approach therefore is for there to be a clear distinction between the volunteering/training carried out and the services the business or organisation provides usually.
What happens with holiday leave and holiday pay?
Those who are on furlough leave still accrue holiday and workers continue to maintain their rights under the Working Time Regulations 1998. This much is certain.
The challenge that may be faced is when furlough leave ends, as those who have been furloughed may wish to use their accrued holiday just as the workload picks up again. This will inevitably become more of an issue the longer the scheme runs for.
It has been suggested that in order to combat this problem, businesses/organisations may offer to buy back the annual leave that is in excess of statutory leave. Another option is to change the holiday policy to encourage workers to build up their holiday, which can then be taken over the next two years.
It is, however, a little uncertain as to whether an employer can force an employee to take annual leave whilst on furlough leave. Under usual circumstances, employers cannot force those on maternity leave to take annual leave because the right to annual leave is connected to the health and safety of workers. The employment courts have classified annual leave as a period of relaxation and leisure, so if you are unable to get away from what you are contractually obliged to do, then you cannot take a holiday.
Finally, what effect has the furlough scheme had on employment law?
The Scheme does not change employment law, but it does challenge it. It must be remembered that the furlough scheme is an economic support package, and its rules determine the eligibility of certain employers to receive what amounts to grant in order to cover the wages or pay of workers who do not have work to do in these times.
HMRC has said that employment law should apply as usual to any organisations who take advantage of the scheme and furlough their staff. A concept like this has never existed before, so employment lawyers have spent many hours trying to decipher exactly what “normal” or “as usual” means and how it should apply to these times which are, quite frankly, extraordinary.
If you are unclear on any of the above, please get in touch for a chat.
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