Further to Thompsons’ Q and A briefing on the coronavirus (COVID-19) job retention scheme (LELR 664), we now provide further thoughts on how the scheme operates and what the likely problems are going to be.

Set to run between 1 March and 31 May 2020, the scheme allows employers who cannot provide their staff under PAYE arrangements with work, to furlough them, with the consequence that they remain on the payroll but are unable to undertake any work for their employer. The scheme will reimburse employers 80% of the salary of furloughed workers, up to up to a maximum of £2,500 gross per month (see LELR 664 for more details).

Whilst the scheme only enables an employer to make a claim for the reimbursement of wages once a worker is furloughed, they are also entitled to re-engage any employee who they have made redundant since 28 February 2020 and furlough them with effect from the date they were made redundant. This means that in theory jobs already lost can be clawed back if employers take advantage of this, with the hope that once the scheme draws to a close work will be available for these employees to continue in, effectively nullifying their dismissal entirely.

Although the scheme is said to run from 1 March 2020 the guidance was only published on 26 March and therefore the only applicable claims from employers for employees which relate to the first 26 days of wages will be on behalf of employees who were made redundant in that period or who were laid off or no longer provided with any work to do.

Concerns have been raised about what happens in a situation when an employer does not take active steps to furlough a worker but simply “closes up shop." In order to counter this, Thompsons advises that in this situation workers should make a direct approach to the employer concerned and set out a positive assertion that they have been furloughed, to confirm they are willing to be treated in this way and to ask the employer to provide written confirmation that this is the case. They should also ask for clarification of what they will be paid in the furlough period. Indeed, Thompsons advises this can be done not only in circumstances where the employer is refusing to do anything but also where the employer is seeking to rely on an express lay-off provision. The whole purpose of the Scheme is to deter employers from making redundancies (and laying off staff), so employers who act contrary to this narrative should be challenged.

Those who work as agency workers or on zero-hour contracts are particularly vulnerable to facing the prospect of their employer taking no positive action. If the employer is not contractually obliged to provide work, they may well simply choose to “sit on their hands”. As the worker has no right to trigger a payment under the scheme, the only remaining option is to lever pressure on the employer to do so by whatever means possible.   

It is not expressly clear whether annual leave accrues during furlough leave but as the guidance states that furloughed workers have the same rights that they did before they were furloughed, Thompsons considers this to mean that the right of workers to accrue 5.6 weeks’ leave (made up of four weeks’ statutory leave under EU rules and 1.6 weeks’ additional leave under UK rules) continues.

Although the government guidance expressly says that employees on unpaid leave cannot be furloughed if they were placed on unpaid leave before 28 February, it does not state that they cannot be furloughed if they were placed on unpaid leave after that date. As such, Thompsons advises that if such workers would otherwise have been furloughed to avoid a redundancy or lay-off situation had they not been on unpaid leave, it follows that they can be, not least because this approach would be in line with the overarching purpose of the scheme.

Articles shared by Thompsons relating to coronavirus (COVID-19) are correct at the time of publication. You should check the government's guidelines for the latest information and advice at https://www.gov.uk/coronavirus.