Furlough: What We Don’t Know

Whilst the Government has provided welcome further information in respect of the Job Retention Scheme and “Furlough Workers”, there still remains some gaps in knowledge which continue to create a degree of uncertainty for employers. The team at Howarths have analysed the most recent guidance (issued 26^th March) and we have put together a list of questions, the answers to which are still unknown. We therefore continue to advise businesses to exercise a degree of caution when looking to enact the scheme, and make sure specific advice is taken. Whilst, understandably in the circumstances, many businesses have already taken the decision to ‘furlough’ certain members of their team, we cannot rule out further guidance from the Government requiring additional communication/clarification to staff. We will of course continue to monitor the situation very closely and update you as soon as we can.

List of unanswered questions as follows:

• If the relevant employees’ contracts include a traditional lay off clause, can the employer rely on that to enforce furlough without agreement?
• Whilst on Furlough, can employees take/be required to take holiday and if so would that be on full pay?
• We have been asked this a number of times already, but can employees do work for other employers whilst on Furlough?
• The guidance states “HMRC will retain the right to retrospectively audit all aspects of your claim”. What exactly does this mean and what will HMRC be looking for?
• How exactly will the backdating claims to 1 March work, will claims run from when employees ceased working?
• Will employers have to continue all benefits in kind during furlough? What if they cannot afford to do so?
• If an employee is furloughed and then starts maternity leave whilst furloughed, what pay will be due?
• We know that the employer must be careful not to discriminate in deciding who to Furlough. Would prioritising vulnerable workers be regarded as discrimination? Also, what about those with serious health conditions?
• What evidence will employers have to provide to prove that their “operations have been severely affected by coronavirus”?
• What does “hired” after the 28^th February mean? What do employers do about employees who accepted offers of employment before this date but have started/are due to start afterwards?
• With regard to redundancies made after 28^th February, how do employer’s re-hire? With consent?
• When an employee is on Furlough, what if they then fall sick or have to self-isolate?  Do they continue as furloughed workers, or should they become entitled only to SSP?
• If looking to furlough many staff, will the employer have to collectively consult or will the “special circumstances” defence kick in?
• We are assuming employees be swapped in and out of furlough (subject to the minimum three-week furlough period), but this isn’t confirmed, is that the case?