The financial impact of COVID-19 on businesses and employees has been clear for more than a year.
Many employers already had contracts of employment for their employees when they subsequently furloughed them as a result of the financial impact of coronavirus on their businesses. However, others did not.
Employers were then generally told by HM Revenue & Customs (HMRC) that they needed to have written furlough leave agreements in place and scrambled to put these in place. However, for those employers that did not have contracts of employment in place for their employees, gaps have arisen in the ability to bring their employees back to work during the easing of the lockdown.
Now that some industries are returning from the lockdown, they are finding that many of their employees have gone and found other work whilst also being on furlough, but have not requested permission from their furlough employers to do so. Many employees have also indicated that they are not willing to return to the existing jobs for which they have been furloughed, which has not only left those employers in the lurch, but has also meant that they have been making National Insurance contributions and pension contributions, as well as possibly topping up an employee’s pay, when that all might have been avoided.
So what can an employer do in these circumstances?
Many might hope that the employees might simply resign, but this is largely wishful thinking. After all, if you were being lawfully paid to do a job and be furloughed, would you resign? Therefore, trying to force an employee to resign could be a high risk move, particularly where that employee has two or more years’ service.
The next route might be to consider making those employees redundant, but redundancy focuses on the role rather than on the individual fulfilling that role. Therefore, if the employer makes an employee redundant because the employee will not return to that role, then the employer could be laying itself open to claims of unfair dismissal and perhaps even discrimination, depending on the circumstances.
Ordinarily, the aim would be to look at the contract of employment itself to see if it requires an employee to request permission before obtaining additional employment. However, in the absence of such a contract of employment, the alternative might be to attempt to enter into a new furlough leave agreement specifying that the employee must obtain permission before seeking additional employment from the point where they were furloughed, which might force the issue.
From there, the situation could go a number of different ways, so it is important that the process of taking employees off of furlough leave and managing any correspondence with them to determine what the next steps are is handled robustly. Employers should seek advice on how to handle this.
Employers also need to be mindful that there could be risks of HM Revenue & Customs reviewing the furlough situation to determine whether it is fraudulent or not (even if the employer claimed the furlough grant with the best of intentions) so, as part of this process, the employer should also gather as much information as it can from the employee to ensure that it has the best opportunity to defend itself should it need to.
It is also important to understand that, whilst it might not be possible to recover the sums that have already been paid, it might be possible to prevent making further payments to an employee who has no intention of returning to their post.
This article is intended for information purposes only and not as a substitute for legal advice. TP Legal does not accept any responsibility for any decisions that you may make as a result of reading this article.
This is a guest blog written by TP Legal Solicitors.
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