Published: July 27, 2020 | Updated: July 27, 2020
Our new monthly legal Q&A with the experts from Frettens beginning with employment
Paul Burton, Head of Frettens’ specialist Employment Law & HR Team, answers your questions.
Question: What is the job retention bonus scheme and how does it work?
Rishi Sunak announced the new coronavirus job retention bonus scheme on Wednesday 8 July.
The new scheme was announced as part of a package of measures to protect jobs. The current coronavirus job retention scheme, commonly known as the furlough scheme, winds down from August to finish at the end of October.
The new bonus scheme aims to reward employers who retain staff that return from furlough. The government will pay employers a bonus of £1,000 for each qualifying employee. Qualifying employees will have to:
- have been paid a minimum of £520 per month, the lower threshold for national insurance contributions;
- be employed through to the end of January 2021; and
- have previously been furloughed.
Full details of the scheme are available here.
Question: How can I deal with employees who refuse to return to work from furlough?
Staff are employed under a contract which, at a basic level, says that they will work in exchange for being paid. Failing to perform that work would, in most cases, be a breach of contract.
The coronavirus situation complicates matters, however. Staff are entitled to take steps to reduce a ‘serious and imminent danger’ without facing detriment or dismissal. This can extend up to and including refusing to return to work if they reasonably believe that this is the only way to protect themselves. Tribunals are likely to be sympathetic to the cautious employees.
Our advice is to proceed with caution when it comes to staff refusing to return to work. The temptation is to discipline or even dismiss but that carries a risk of claims for unfair dismissal or even disability discrimination. Instead, engage with staff to identify their concerns and consider options or changes to their working practices which might allow them to continue to work.
Question: Can you be given notice to terminate your employment while on furlough?
The short answer is yes. Current guidance is that staff can be given notice while they are furloughed.
Some businesses are, unfortunately, making redundancies at the moment and they are using the furlough scheme while staff are on notice after being made redundant.
However, all standard employment laws remain in force and therefore employees’ rights not to be unfairly dismissed and receiving redundancy pay are still in place.
Whether an employer is wanting to go through a disciplinary procedure with an employee or make them redundant, they still have to be mindful that a full and fair procedure, where appropriate, should be carried out. If you are unsure about this, you should seek legal advice.
There are mixed opinions among legal professionals about whether use of the furlough scheme will be considered a reasonable alternative to redundancy. The issue has not yet been tested in an employment tribunal and no doubt it will be far too late for many people by the time there is a binding ruling on this issue.
What we can say is that many employers are making redundancies while still using the furlough scheme and we believe it is unlikely that this will be held to be unlawful.
Question: Why did we see so many redundancies announced in early July, and will we continue to do so?
Changes to the furlough scheme announced in June meant that many employers have started to reconsider one of their most expensive overheads: staffing. Several national and multinational companies announced redundancies in early July.
Redundancy mechanisms exist to allow employers to release staff where there is a reduction in need for the kind of work that individual performs. They are a ‘no-fault’ termination of employment to protect the sustainability of the business and most employees are entitled to some form of redundancy payment.
Unfortunately, this will be of little consolation to individuals concerned about their financial security in the current climate.
Despite the efforts of the government, and particularly the Chancellor, to provide financial support and incentive to employers, more redundancies are probably on the horizon when the furlough scheme ends on 31st October.
My colleague Chris Dobbs wrote at length about this in a recent blog post that you can read here.
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