Which employees can I furlough and how does the furloughing process work?

Author
Sarah Clarke
Barrister | 3PB Barristers
30th March 2020

Further details about the ‘Coronavirus Job Retention Scheme’ have been announced by the government, outlining how the scheme will operate, and who will be eligible. Many businesses will now be considering what, if any, legal implications there may be in respect of how the furloughing process works. 

Many businesses will wish to ensure that they at least have a skeleton staff in place in order to service any ongoing needs during the next few months, even if the bulk of the workforce will not be required. If a business has several employees carrying out similar roles in respect of the types of employees whom they wish to keep working during the upcoming period, how do they select who to furlough? In particular, employers may be concerned about any potential discrimination claims which could be brought under the Equality Act 2010 (‘EQA’). Another pressing issue is what impact furloughing might have on an employee who is already on or about to start maternity leave.

I have a pool of several employees who all do the same type of role, and I need to choose whom to furlough. Am I allowed to choose those who are in the higher risk categories given that it makes more sense for them to stay at home?

Whilst it might seem obvious to simply choose to furlough those employees who have underlying health conditions, are pregnant or are older, businesses must be alive to the potential of discrimination claims.

For instance, an individual with an underlying health condition may qualify as a disabled person within the meaning of the EQA. Let’s say an employer decided to apply a blanket policy of furloughing all employees who fell within the higher risk groups. Someone who fell within the high-risk group who was also disabled might be able to argue that such a blanket policy was more likely to disadvantage disabled people. This could give rise to a claim for indirect disability discrimination or a failure to make reasonable adjustments. Would you be able to show that the blanket policy was justifiable? Is there any adjustment you could make for the disabled employee to enable them to remain working at full pay but ensure they were not placed at risk? 

Similar considerations would apply in respect of pregnant employees or older employees as there could be potential claims of sex/maternity or age discrimination. If an employee in a high-risk group required specific IT facilities in order to continue working, could efforts be made to set these up at their home? If it is absolutely essential for a particular role to be carried out in the workplace, is it possible to arrange for such work to be done outside normal office hours such that the employee would not have to come into contact with others? Could you employ more cleaning staff to ensure that all surfaces and doors were properly cleaned before the employee had to attend the office? All of these issues should be fully considered before making a blanket decision to put all high-risk employees on furlough leave. The less risky option would be to draw up an objective set of criteria which doesn’t specifically target specific groups. If you are concerned about the implications in respect of pregnant, disabled or older employees, you should seek legal advice.

There are certain employees I am keen to keep working, as they are the most efficient/qualified/competent staff. Can I simply tell them they are not being furloughed, or are there any factors I need to consider before I make this decision?

As explained by Katherine Anderson in her article, there are legal implications of putting staff on furlough leave where there is no contractual right to do so. However, assuming your contract does allow you to do this, one interesting question is whether you can simply choose the staff that you consider are most useful/competent to remain at work.

One potential issue might arise in respect of disabled employees. If a disabled employee is less productive/has a lower target due to their disability, or for some reason connected to their disability are not viewed as being as desirable a candidate to keep in the workplace, if you put them on furlough leave there are various potential disability discrimination claims they could bring, such as discrimination arising out of disability or failure to make reasonable adjustments.

If you are in an industry in which employees can only do their work in the workplace, some of your staff may have genuine concerns about travelling to and from work and coming into contact with colleagues, such that they might prefer to be put on furlough leave. Some of the staff you wish to retain may be in a high-risk group such that requiring them to attend work would put their health at risk. In such scenarios, you should have an open discussion with your staff as to their reasoning behind not wishing to attend work. A refusal to attend work could form the basis of a disciplinary process. However given the extremely unusual circumstances, one should be cautious about disciplining someone over genuine concerns about Covid-19. Indeed forcing someone to attend work against their will, or disciplining them for not attending, could in certain circumstances constitute a breach of the implied term of trust and confidence.

I have a member of staff currently on maternity leave. Can I put her on furlough and reduce how much I pay her?

Statutory maternity pay (‘SMP’) is governed by the Social Security Contributions and Benefits Act 1992. The amount of SMP is calculated on the basis of the salary actually received during the 8-week period ending immediately before the 14th week before the expected week of childbirth [see https://www.acas.org.uk/managing-your-employees-maternity-leave-and-pay/.... As such, if an employee has already commenced their maternity leave, then the amount which they are entitled to receive will have already been determined. It would not be permissible to reduce the amount to which they are entitled by statute by seeking to put them on furlough. However in theory there is nothing to prevent you placing an employee on furlough who is on maternity leave (subject to my observations below). The government guidance on those on maternity leave is that:

“If you offer enhanced (earnings related) contractual pay to women on Maternity Leave, this is included as wage costs that you can claim through the scheme.”

Thus it would appear that if your business offers enhanced contractual maternity pay, then it would be possible to furlough that employee in order to receive financial assistance with the payment of any enhanced maternity pay. However at present it is not entirely clear how this would work in practice. There is nothing in the guidance which would prevent a woman on maternity leave from agreeing to be furloughed, thus bringing her maternity leave to an end. This would likely  prevent her from returning to her maternity leave at a later date.

I have a pregnant employee and I understand that she is therefore in a high-risk category- can I automatically put her on furlough leave?

Given that the advice for pregnant women is to stay at home and avoid social contact as much as possible, many pregnant women may be keen to be put on furlough leave. However given that maternity pay is calculated on the basis of pay actually received during a set 8-week period, some mothers-to-be may be concerned about the financial impact on their maternity pay of being furloughed and may therefore wish to continue to work and receive full pay, if possible. The best thing for businesses to do is to have an open dialogue with pregnant employees about these issues and ascertain what your employee wants to do as a starting point. It may well be that in your particular industry, it is simply not possible for a pregnant woman to continue to work (e.g. a factory worker in a factory which has closed) and so there is no other option than to put them on furlough. However many businesses are able to continue providing work for staff (for example, by providing them with a computer and allowing them to work from home). If a pregnant employee was able to continue to work from home, yet was furloughed because of her pregnancy, then you may well face a claim for direct sex discrimination. 

I have an employee who has kidney disease/asthma/heart problems (or any other ailment which places them in a high-risk category). However they are a vital member of staff and I really need them to continue to work. Can I force them to do so?

As an employer, you have a duty of care to your employees, including the duty to provide a workplace which does not place their health at risk. Given the current guidance, all efforts should be made to enable staff to work from home. If this is impossible, then you should take all precautionary measure to ensure that the workplace is as safe as possible for them, including proper cleaning of the workplace, ensuring staff can work at a safe distance from each other, providing personal protective equipment and having as few staff as possible in the workplace at the same time. If, despite putting such measures in place, a member of staff still refuses to go to work, you could consider offering unpaid leave or for the employee to take time off as holiday. If you are very keen for them to still attend work, you could threaten them with disciplinary action if they refuse to attend. However as stated above, this approach is not without its risks and you should proceed with caution.

I have put a pregnant employee on furlough and reduced her pay to 80% of normal. She is soon to go on maternity leave. Do I have to pay her SMP on the basis of her normal salary or her reduced salary?

As set out above, there is a specific formula set out by statute as to how SMP is to be calculated, which is based on actual earnings during a specific 8-week period. It is not based on one’s normal earnings. Thus if during the specific 8-week period a pregnant employee has received less income as a result of being furloughed, then it is permissible to take this into account when calculating the amount of SMP that is due.

Author Bio

Sarah Clarke is a barrister specialising in employment law at 3PB Barristers, based in Bristol.

Whilst every effort has been made to ensure the accuracy of this article as of the date of writing (29 March 2020) it should not be relied upon as legal advice in respect of any particular case and no liability is accepted in respect of the same.

3PB Barristers’ employment law group offers expert advisory and advocacy services to private and public sector employers and individuals, as well as service providers and businesses across all areas of employment law.

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