Extended Furlough: Rehiring Employees

Coronavirus, Furlough

After recently extending the furlough scheme until March, with review in January, the Government have added some noteworthy amendments. Of particular significance is the introduction of the principle of rehiring redundant employees and placing them on the extended furlough scheme.

“Employees employed as of 23 September (day of Job Support Scheme Announcement) and notified to HMRC by RTI on or before that date, who has since been made redundant can be rehired and placed on the Scheme.”

Put simply, those that were employed on or before the 23 September 2020 (i.e their employer made a Real TimeInformation payroll submission on their behalf on or before this date), and have since either been made redundant or voluntarily left their position, are eligible to be rehired by their employer and placed on the furlough scheme.

What is the process?

 The actual process of rehiring these employees appears to be fairly straightforward:

  • Reemployment offer and acceptance (we always recommended this is done in a written agreement)
  • Employee agrees to be furloughed, in accordance with the HMRC rules.

Albeit the process is unlikely to pose any difficulties, the problems start to arise when considering the implications it could have for the employer, largely because there are a lot of questions that simply do not have answers yet and won’t for months or even years.

Areas of uncertainty

How will their employment be viewed?

It is unclear whether the reemployment will be classed as ‘new’ employment or continuation of ‘old’ employment, but this will obviously have implications on their rights as employees; if they were employed for two years prior to redundancy, or if this reemployment will take them to the two years mark, then they will have full employment rights and may be able to claim unfair dismissal when their furlough comes to an end down the line

What happens when the furlough scheme ends?

 There is no clear answer, but this is likely to be considered on a case-by-case basis. Whether the circumstances which initially justified dismissal continue to exist will be particularly important.

 Jobs that require regular training

Whilst employees are able to undertake training whilst on furlough, it could become a significant cost to employers to continue training employees throughout the furlough scheme even if continual training is a mandatory requirement for the role, especially if the intention isn’t for them to then return at the end.

 In addition to potential legal complications, employers also need to consider the large cost implications this could have for them. For example, what if an employee earns more than the monthly cap of £2,500? Will they be expected to pay the rest? Is it a waste of administrative time, after making an employee redundant or dismissing for some other reason, and then completely reversing that process? And while the Government are currently paying 80% of the employee wages, this rule is up for review in January, after that the company could be required to contribute to the furlough sums; we saw this occur in September and October.

Something important to further consider is that employees, even re-employed, will continue to accrue holiday and annual leave. This would then have to be paid on termination.

So, there are a few areas with either uncertain answers, or answers that will depend on a case-by-case outlook. . Any area that has this lack of certainty for a company is a risky step to take in any circumstance, never mind when it involves the ever-changing furlough rules.

How we can help

 As an owner-run company, we know the pains of having to wear many hats and how time is precious. As qualified employment and HR lawyers, we know the consequences of getting HR decisions wrong. We work with you to let you focus on what you need to be doing in the business with the peace of mind that all letters and decisions are run past a qualified lawyer before you implement them.

 When you partner with Thrive for outsourced HR support, we can reduce your stress and free you up to work on the business and to make HR decisions with confidence.   

With people at the core of every successful business, keeping on top of the ever-changing legislation and making the most out of your people can be challenging, but we are here to help.

We can also support your business in the event an employee approaches ACAS or the employment tribunal

Get in touch today to invest in your business and make your HR stress free. Email Jodie.hill@thrivelaw.co.uk

Disclaimer

Please note this blog is for reference purposes only. It does not constitute legal advice and should not be relied upon as such. Specific legal advice about your specific circumstances should always be sought separately before taking or deciding not to take any action. Please contact us if you have any questions on enquires@thrivelaw.co.uk

 

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