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Coronavirus Job Retention Scheme – first two weeks on the front line (UK)

As anyone who has spent the last fortnight trying to apply the Government’s CJRS knows, there is currently no actual law.  Bar some guidance clearly not written by employment or HR specialists (hence indiscriminate references to workers and employees, and use of “laid-off” to mean both put on leave without pay and made redundant), pretty much everything else is speculation, inference, press comment, leaks and that chap on Twitter whose uncle heard something at a bus stop outside Parliament.  It is not a good way to make law.

Nonetheless, the Great British Public is being asked to advise upon, implement and live with the consequences of a piece of law of almost unparalleled importance which is so far not even drafted, let alone in force.  When the Scheme was announced on 17th March some rough edges were inevitable – the biggest State intervention since WW2, and all seemingly put together in about three days.  Despite that, it is our perception that the measure has been extremely successful in calming employers and employees in circumstances where otherwise the economy might have faced hundreds of thousands, possibly millions, of redundancies.

As a political measure, therefore, the CJRS leaves the Government’s reputation in workplace matters currently riding pretty high. It has made appropriately Churchillian rallying calls and simultaneously taken the middle stump out of any later Labour Party allegation that the Tories are not the party of the common man. But there is still all to play for in the Government’s translation of the principles announced into hard and enforceable law.  It is within its hands to stay up high on its white charger or to taint its legacy irreversibly by hedging the Scheme around with so many caveats and conditions that it becomes a grudging shadow of itself and all its initial promise is lost.  Equally, the transition into law should not take so long that employers have had to make decisions based on broad principles alone and then face retrospective disqualification or sanction when the actual law undercuts the initial breadth of the Chancellor’s announcement.  Two weeks is more than long enough for it to have made some statements about the many obvious detail questions arising under the Scheme but its guidance has scarcely done so.

All that would imply that it is in the Government’s own best interests that the application of the Scheme should be reasonably easy and that it should not produce outcomes which are unfair or offend the common sense of the “man in the street”, or as more precisely termed in Westminster, prospective voter.  However, some of the noises coming from those various sources suggest that the Government could be on verge of snatching defeat from the jaws of victory on this one.

1.         We know that you won’t be able to work during furlough, which is fair enough, and there is also an assertion from Acas (though Acas should strictly interpret and apply the law, not make it) that you can’t be on furlough and on holiday at the same time, however sensible that might be.  We know also that the minimum consecutive period of furlough which can be claimed for is three weeks.

Does that mean that the employer can’t claim for someone who has taken one day’s holiday in the middle of that three weeks (and therefore broken that consecutive period)?  Would it be different, and if so, why on earth should that be the case, if the employee took that one day’s holiday between two separate three week periods?  Or does it just mean that the employer will get back the whole of the three weeks’ furlough pay minus the one day’s holiday?  Similarly if the employer has an unexpected emergency requiring the brief recall from furlough of one or more of its staff, then obviously it must pay them without assistance for those days, but on what logic would they then not receive furlough pay for the days either side?

2.         There has been much comment around how far eligibility for furlough support from HMRC will depend on the employer actually needing the money (being “severely affected”, in the terms of the Government’s initial announcement).  Similarly, there has been a lot of outraged booing and hissing at some big companies and Premier League Clubs which have furloughed lower-paid staff while maintaining very significant salaries at more senior grades.  There are obviously moral and holier-than-thou political points to be scored all over the place here, but from the practical perspective, eligibility to furlough support cannot realistically depend on how far the employer is prepared to force pay-cuts on its senior people in breach of their contracts of employment.

3.        Consequently it is not clear what “severely affected” means, or if it was even intended as a condition at all, rather than just context.  The objective of the Scheme is to retain jobs affected by the Coronavirus and precautions taken to combat it.  It has been clear from the start that this will only cover those employees who would otherwise have been laid-off (presumably in either sense of the term) for that reason.  However, it is long-established in English law that the test for redundancy is whether you need the person, not whether you can afford them.  If the employer’s financial resources determine eligibility for furlough support, then we will end up in the surreal position that if you are rendered surplus to requirements by the virus but work for a company that can afford to keep you on, you are let go, but if you do the same role for a company without the means to keep you on, you are kept on.  So far as its appeal to the man in the street goes, that surely cannot be the plan.

© Copyright 2020 Squire Patton Boggs (US) LLP

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About this Author

David Whincup Employment Attorney Squire Patton Boggs Law Firm
Partner

Following ten years at a Magic Circle firm, David has been Head of our London Employment practice since 1994. His expertise gained from twenty-five years as a specialist Employment Law practitioner covers a wide variety of employment-related issues, including in particular individual and team recruitment issues, policy and contract drafting, disciplinary and grievance procedures, individual and collective redundancies, the defence of employee discrimination and dismissal claims and other litigation, whistleblowing, employee health, data protection and matters surrounding...

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