Before the pandemic, “Furlough leave” or “Furloughed employee” were not familiar concepts under UK employment law. Indeed, when, as it was known on its inception, the Coronavirus Job Retention Scheme (CJRS) was introduced by the Government on 20 March 2020, employment lawyers had to quickly come to grips with what it meant for employers and employees alike. It was not a straightforward proposition. Whilst the aim of the scheme was clear - to save jobs and livelihoods during the turmoil of the UK economy – there was much uncertainty. Many questions were asked concerning eligibility, hours to be worked; percentage of salaries to be paid; timing of payments; tax implications of the scheme; implications for those on/or about to embark on maternity leave; and impact on annual holiday and sick leave.
In employment law firms, lawyers were frantically responding to enquiries from employees who wanted to know their rights and from employers who were nervous about whether its existence should affect their decision-making about the timing of redundancies. The concern was whether making an employee with over two years’ service redundant, whilst furlough was still in operation, could amount to unfair dismissal should an employer not consider furlough as an alternative or provide a good explanation as to why it was denied.
And then in July 2020, the concept of “Flexi-Furlough” was introduced, adding to the complexity and cost of the scheme. Employers were given the opportunity to furlough employees for any amount of time and any work pattern, which arguably put their decision-making under more scrutiny should they be forced to consider redundancy as their only option.
18 months on and the Furlough Scheme and all Government contributions have now come to an end. So what does this mean for employers and employees? There will be organisations who have not, and may never, financially recover. And in practice, although the furlough scheme officially finished on 1 October 2021, flexi-furlough may continue for many of these businesses as a way of retaining staff should they struggle to recruit and/or bring back staff to their previous roles on full salary. For employees who have been furloughed, they have the legal right to request for flexible working should they have been continuously employed for more than 26 weeks.
An end to the scheme will bring about the need for businesses to restructure, consider their staffing requirements and premises as well as the integration of staff back into the workplace and of course contractual arrangements. Changing terms and conditions of employment requires employee agreement and can become a legal headache if the process is not followed properly. No consent can result in the breach of contract and/or unfair dismissal for employees with over two years’ of service.
No crisis has affected the British economy in this magnitude since the Great Frost in 1709. Covid-19 has reshaped the nation’s approach to work. Many businesses in differing sectors will race ahead and many will be left behind. Who knows what the forecast is but we must not underestimate the reality that many employers will not be able to avoid making redundancies. The importance of knowing what rights employees must be afforded in the event that redundancies are a necessity must be emphasised if a floodgate of claims from disgruntled ex-employees to the Employment Tribunal is to be minimised.