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14 April 2020

Q&A: Employment law and Covid-19

Employment Solicitor James Conley recently took to our Coronavirus Business Discussion Group on LinkedIn to host a live Q&A for group members.

See below the Employment Law Q&A our members asked, with James’ advice.

Q1. What will happen to staff holiday entitlement if they have been furloughed?

In terms of accrual, comparisons are being made to sabbatical leave – during which the statutory minimum annual leave will continue to accrue despite no work being done. It is therefore very likely that workers will continue to accrue their 5.6 weeks holiday entitlement during any period of furlough. However, employers could attempt to negotiate a change in contractual terms so that any annual leave over and above statutory leave does not accrue during furlough leave. Where staff are unable to take annual leave due to furlough, they will be able to carry that leave over into the next holiday year if they wish.

Does this mean staff will have to take all accrued annual leave once back working as normal and before the end of the holiday year?

Not necessarily, the employer could require that annual leave is taken once the furlough period comes to an end though.

Q2. What other options does a company have if the Government does not extend the 3 month furlough pay but we are still on lockdown or companies are still financially seeing the effects of it?

In this case, employers will have to decide how many staff it can support and make redundancies if they cannot support them all. Another option might be to agree a reduction in the hours, or pay, of staff if it wanted to limit the impact the lockdown was having without going through a full redundancy process.

Would companies use this as a way to stagger the return to work to manage cash flow? Is this the same as short-time working?

Absolutely, short time working means providing staff with less work (and less pay) for a specified period. So it can be a great way for businesses to retain staff without crippling their finances. Of course, it would require agreement with the employee – but the alternative for them is likely going to be redundancy.

Q3. What about employees who had been given notice of redundancy or placed on unpaid leave before furlough leave was announced?

The scheme is backdated to 1 March 2020. It would therefore be possible, in theory, for an employer to propose to employees who are still employed, but have been given notice of redundancy or placed on unpaid leave after 28 February 2020, that they be put onto furlough leave instead. Employees made redundant since 28 February 2020 can be re-engaged and put on furlough leave, although sadly there is no obligation on them to do so.

Would this also be the case for anyone that has suffered a withdrawal of employment offer as a result of the business uncertainty? Could they go back to their employee during their notice period?

Yes, if the employee is working out their notice, and have been told that their offer of employment at another company has been withdrawn or postponed, they can ask that they be placed on furlough rather than leave the business. But… if they have already left the old employer, there isn’t an obligation on them to put the employee back on payroll and furlough them.

Q4. I have a client who has been told that the chap that renting her home is not being furlough but has been made part time? Surely depending on how many hours he’s working it’s better to not work and be furlough. Rather that working, and getting paid for fewer hours?

From the business’ perspective, it wouldn’t be able to furlough the worker as, by the sounds of it, they have work for him to do. Therefore, they cannot furlough. You’re correct though, it would be better for him to be furloughed as he would receive higher wages.

Can some staff be furlough and others kept full time working then?

Yes this is possible, in order to reduce the financial strain on a business it could furlough a portion of its staff whilst keeping others on to maximise cash flow.

Please join our LinkedIn Coronavirus Business Discussion Group to share advice with local businesses.

For more information on employment law through this Covid-19 period, please read our articles on:
Redundancy, lay-off, short-time working and Covid-19
Covid-19: Practical points – Collective consultation and redundancy

The employment lawyers at Steeles Law are very experienced in business re-organisation and the difficulties associated with the short-term challenges to business in these contexts.  If we can assist in any way with the challenges that your business is facing or you have other Employment Law Q&A you would like advice with, please do not hesitate to contact the team via on employment@steeleslaw.co.uk or by calling 01603 598000.

*The information provided in this article is designed to provide useful information on the subject, not to provide specific legal advice.

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