Job Retention Scheme Flaws

ELA identifies areas for concern

Today, the Employment Law Association (ELA) has identified a number of significant flaws with the Government’s Coronavirus Job Retention Scheme, in a letter to the Department of Business, Energy and Industrial Strategy (BEIS). A series of questions have been put to the Government department (which can be found in this paper) in the hope that they will address these wide-ranging issues for employers. The association is currently awaiting the Government’s response.

ELA’s Covid-19 Working Party have identified areas of uncertainty within the Guidance and Directions issued by the Government which creates risk for employers and their staff as to how furloughing is implemented and managed.  Due to the gaps in the scheme and conflicting Government guidance, companies are left to interpret the rules and risk placing themselves on the wrong side of the legal fence. As a result of this, they could be unlawfully deducting the pay of their workers which could result in claims being issued in the Employment Tribunal.

The scheme is unusual as the Government chose implementation of it via a series of announcements and HMRC published guidance, rather than through the rigour of the legislative process. A fallout is a risk highlighted by ELA, because there is a disconnect between the important principles of employment law and how the Scheme works in practice. Therefore, the BEIS must answer the questions put to them, which include:

  • Does acting as an employee representative constitute “work” for the purposes of furlough, and therefore break the furlough period for that employee/make them ineligible for Government support?
  • Can an employer commence collective consultation on proposed redundancies while employees are on furlough leave?
  • Does an employer have to collectively consult when initiating furlough scheme and if so, when?
  • Can an employer force an employee to take annual leave during furlough?

Paul McFarlane, Chair of ELA’s Legislative & Policy Committee, comments:

“It’s essential that the Government responds to this paper and provides clarity on the gaps in their guidance which currently places employers and employees in a vulnerable position.

“Whilst we navigate through these unchartered waters, support is needed and those most vulnerable must be protected, which is why clear guidance is so important. The Working Party has identified a number of areas where conflicting guidance is given and urge the Government to be transparent so employers are protected from litigation down the line.

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