Making a Statement – Is Litigation Assistance in Breach of Furlough Rules? (UK)
Following on from the new Acas guidance on involvement in grievance and disciplinary meetings while on furlough comes the logical next question – where there are ongoing legal proceedings (we shall assume in the Employment Tribunal, but it could be anything), is an employee on furlough able to assist? Or will he thereby be deemed to be working for or providing services for his employer, neither of which he is allowed to do? If you need one of your employees to prepare a witness statement, provide comments on a pleading (yours or the other side’s) or look out relevant documentation, will that require you to take him off furlough and potentially prejudice three weeks’ worth of your Job Retention Scheme support entitlement for him?
Based on the Acas guidance (but bearing in mind that it is not law and may or may not have been written in conjunction with HMRC) the logical answer to this must obviously be that it all depends. If you as the furloughed employee are part of the in-house legal team and would be working on the conduct and management of this case if you were not furloughed, then doing that sort of work would clearly infringe the CJRS requirement that you do no work for your employer. However, what if that is not what you signed up for? What if your involvement in an ET claim as prospective witness or source of relevant disclosure is merely an unfortunate accident of place or time, a sort of workplace drive-by in which you were unwittingly the victim? Then it must surely be much harder for HMRC to take that line. A number of reasons support that view:
The conduct of tribunal litigation is in part a statutory process. Its requirements for disclosure and witness statements are not something gratuitously decided upon by the employer. It might be argued that since attendance at the hearing and production of documents can be compelled by order of the Employment Tribunal, it is only at that point that the employee is not assisting his employer voluntarily. However, the ET system at present (with Judges trapped at home, often without full access to files) would be quite unable to cope with thousands of otherwise completely unnecessary applications for disclosure and witness orders made merely to provide some judicial air-cover for the off-chance that HMRC might take the point some years hence in a retrospective audit.
There must similarly be the strongest of public policy arguments that the operation of the judicial system should be as little prejudiced by the CJRS as possible. Justice delayed is justice denied, and all that. If employers could not arrange for timely witness statements from key witnesses because they could not afford to lose furlough support for them, they would have to apply to the ET for hearing deadlines to be pushed outwards. Attacking the backlog of cancelled cases will be a priority for the Tribunals (not just Employment but also Immigration and – take note, HMRC — Tax) when the lockdown lifts. Compounding that problem by an entirely gratuitous and self-inflicted restriction of this kind seems very unlikely to have been the intention. The greater probability is that it has just not been thought about at all.
The employer technically cannot know whether an employee’s disclosure or testimony will help it until it asks. However, the system could not possibly operate on the basis that the employee would not be deemed to be adding value or providing services to the employer if his involvement contributed nothing or was actively unhelpful, but he would be in breach of his furlough conditions if his input to the case were in any way beneficial. In the same vein, that would mean that there would be no problem in respect of a furloughed employee providing a statement for the claimant’s solicitor, whereas a colleague helping the respondent’s lawyers on the same case, possibly in relation to exactly the same factual point, would not qualify. That is clearly a nonsense.
By extrapolation from the Acas guidance, if you can be a witness in internal grievance or disciplinary proceedings without coming off furlough, how likely is it that the position would be different for your doing so in the far more serious and less voluntary context of actual litigation?
Perhaps the best compromise for the employer is to treat requiring a furloughed employee’s participation in the litigation process as akin to a workplace emergency. Make sure you can show why you needed that employee’s input to the case at that time and could neither use someone else nor wait until after he comes off furlough. This might be a case management deadline, maybe, or the secret knowledge that in fact he won’t be coming back and may then be less disposed to help you. Make sure also that where the time spent for the employer was, say, half a day or more, you pay the employee full rate for it and make no claim for that period under the furlough scheme. Even if by some mischance that still puts you technically in breach of the furlough rules (and I am pretty sure that it wouldn’t), you will still be proof against any allegations that you have tried to get your employee to work to your benefit on HMRC’s ticket.