September 24, 2020

Volume X, Number 268

September 24, 2020

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September 23, 2020

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September 22, 2020

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Early guidance for administrators considering furlough (UK)

Earlier this week, Mr Justice Snowden gave the first judgment on the Government’s Coronavirus Job Retention Scheme [here].  Rather than bask in the Bank Holiday sunshine digging into his Easter eggs, he sought to bring clarity to some of the more murky aspects of the scheme – specifically, how the Scheme operates when the employer is in administration.  The case concerned Carluccio’s restaurant chain which entered administration as a result of the restrictions imposed by the Government to reduce the spread of COVID-19.

At the time of Mr Justice Snowden’s judgment, the Scheme was explained in Government guidance alone.  Those who have been advising businesses on the basis of this vague and constantly evolving guidance will note that the judge sensibly chose to focus his advice on existing law and to avoid entirely any debate on how the guidance might be interpreted.  He was also careful to note that his judgment and the directions he gave to the Administrators could be trumped by legislation implementing the Scheme if and when that is available. 

Since the judgment the Chancellor has provided further information on the Scheme in the form of a Treasury Direction made under the Coronavirus Act 2020.  There is, however, nothing in this that would disturb the decisions reached by the judge although it does add a further layer of complexity and confusion to the “opt-in” vs “opt-out” debate to furloughing.  You can read more about this [here] and [here].

Mr Justice Snowden’s judgment will give some comfort to Administrators wanting to claim under the Scheme and pay out to employees.  It will also be of interest to in-house solicitors and HR professionals for its discussion of taking the “opt-in” (rather than “opt-out”) approach when proposing to furlough.

© Copyright 2020 Squire Patton Boggs (US) LLPNational Law Review, Volume X, Number 108


About this Author

David Whincup Employment Attorney Squire Patton Boggs Law Firm

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...

+44 20 7655 1132

Helen Adams is an associate in our Labor & Employment Practice based in our Manchester office.

Helen has advised some of the world’s best known companies. She is an experienced employment lawyer who focuses on providing clients with pragmatic and commercial solutions.

Helen has considerable experience working with a broad range of corporate clients, predominantly in the media, retail, sports and financial services sectors. Her practice covers the full range of contentious and non-contentious employment matters, including domestic and international corporate transactions, TUPE transfers and business restructurings; redundancies; varying terms and conditions of employment; disciplinaries and grievances; and unfair dismissal, discrimination and restrictive covenant litigation.

Helen also regularly advises senior executives on contract and exit negotiations and has niche expertise in advising corporate clients facing board-level issues; advising clients in the financial services sector on contentious and non-contentious partnership matters; advising high-net-worth-individuals on staffing issues, including the protection of confidential personal information and minimum wage and working time issues arising from irregular working patterns.

Prior to working at Squire Patton Boggs, Helen trained and spent a number of years working for a corporate law firm in London.

Helen is a member of the Employment Lawyers Association.

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