After the Coronavirus Job Retention Scheme
The Coronavirus Job Retention Scheme (Scheme) has been through a number of developments and is with us until the end of October. Getting agreement on the terms of furlough remains important and from 1 August 2020 the Scheme is operating on a reduced basis. What will face employers after October and the continuing economic uncertainty is difficult to say. Companies may look at their own version of the Scheme with agreed reductions in pay and hours or lay-off and short time working. Unfortunately redundancies may have to be considered. Many businesses have gone down this route already notwithstanding support from the Scheme, they may see their problems as more long-term. Redundancies can take place during a period of furlough but may be challenged in subsequent tribunal proceedings if support from the Scheme was still available. Preparations will have to be considered if redundancy might be an option, particularly if the statutory consultation rules (where more than 20 employees are affected) will apply. It is important that those on furlough are not treated unfairly in any process.
In financial and organisational terms there is also the interesting question of the accrual of holiday during a period of furlough. This also has an impact on termination of employment as employees are compensated for accrued untaken holiday. Government guidance on the issue published on 13 May 2020 confirms that employers can require staff to take annual leave during furlough subject to the usual statutory notice periods. The notice required is the minimum of twice as many days as the number of days holiday the employer requires the employee to take. However the guidance also states that employers should consider whether any restrictions the worker is under, such as the need to socially distance or self-isolate would prevent the worker from resting ,relaxing and enjoying leisure time, which is the fundamental purpose of holiday. This may be easier to achieve as lockdown is eased. Engagement with employees and explaining why they are required to take holiday will be important. Employees are entitled to full pay during periods of holiday even if they are on furlough. Legislation has also been passed allowing workers to carry forward four weeks of annual holiday entitlement where it has not been reasonably practicable for the worker to take annual leave. Accrued untaken holiday can be carried forward into the following two leave years, again creating a potential organisational/financial issue. This is really aimed at those who have been working on the front-line and unable to take holiday.
Please do not hesitate to get in touch if you have any questions for us. Our Head of Employment, Iain Jenkins, has been putting together our updates. Please contact him on email@example.com if you require any assistance.