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Briefing

COVID-19 Job Retention Scheme - Key questions for employers

Key questions for employers – as at 30 March 2020

The Government published further details on the Coronavirus Job Retention Scheme (the JRS) on the evening of 26 March. The JRS is the mechanism under which the Government will subsidise part of the salaries (and associated tax costs) for employees who have been furloughed. A link to the Government guidance is here.

The guidance provides some helpful clarification on areas that have been causing employers concern following publication of the outline terms of the JRS. The JRS is an admirably straightforward arrangement given that it has been devised at breakneck speed. Nevertheless, there remain a number of difficult points. In particular, the JRS does not relax existing employment law rules, which may leave employers with some tricky decisions on implementation.

This note summarises the position as at 30 March 2020 and is intended to supersede our prior briefings of 20 and 23 March.

In summary:

  • All UK employers can participate in the JRS.
  • The JRS applies to all employees (other than new joiners since 28 February 2020). This includes employees on atypical working arrangements. The self-employed and ‘workers’ cannot benefit from the JRS but may be covered by the Government’s separate scheme for the self- employed.
    • Employees must be furloughed (that is, suspended from active work) for their pay to be covered under the JRS. It may therefore be preferable for employees to be furloughed rather than placed on short-time working arrangements.
    • Under the JRS, the Government will subsidise 80% of the gross salary of furloughed employees, subject to a cap of £2,500 per month.
    • Where salaries for affected employees fluctuate on a monthly basis, the Government has introduced a sensible averaging arrangement for determining how much pay will be subsidised under the JRS.
    • The Government has confirmed that it will reimburse employers for the employer NICs and minimum auto enrolment contributions in respect of pay covered under the JRS in addition to relevant capped salary amounts. Income tax and employee NICs are to be deducted by employers as normal from salary payments subsidised under the JRS.
    • The relevant payments will be made to the employer under a Government grant, paid through HMRC. Payments will be made on a three-weekly cycle.
    • Putting an employee on furlough will normally require employee agreement, as will any associated reduction in salary (for example because the employer is unable to top up the difference between the amounts subsidised under the JRS and the employee’s full salary). In many cases, large employers will need to take a pragmatic approach to implementing necessary changes and may have to rely on implied consent.

We set out below a more detailed overview of the key takeaways and identify outstanding open points and points employers will need to bear in mind when introducing or operating furlough arrangements. The right approach for businesses will depend on their own specific circumstances. Please feel free to speak to us if you would like to discuss your own situation (our contact details are set out at the back at this brochure).

Confirmation that all employers can participate

All employers may participate in the JRS. The only exception is that the employer must have created and started a PAYE payroll scheme on or before 28 February 2020 and have a UK bank account. This is presumably to prevent companies from being incorporated now and taking on sham employees specifically to benefit from the JRS.

Crucially, there is no affordability gateway for participation. In other words, there will be no assessment of whether it is financially necessary for employers to furlough their staff. Subject to the very narrow exception described above, therefore, any company that has decided to furlough will be able to participate.

There are no conditions to participation in the JRS

Unlike Government support schemes in some other countries, employer participants in the JRS will not be restricted from making redundancies or otherwise be subject to any conditions on how they operate.

The Government has urged employers to consider the JRS as an alternative to redundancies and to seek to avoid redundancies wherever possible. Employers will need to consider carefully the PR implications of proceeding with redundancy programmes for so long as the JRS remains in place (especially if some of the workforce remains in active employment on full pay).

The past week has seen significant adverse press comment for some employers who have proceeded with staff redundancies.

There is no requirement for amounts paid out to employers under the JRS to be repaid. Any payment made is a grant rather than a loan.

The only other required step is for employers to write to employees who have been furloughed and keep a record of that communication. This will form evidence of the fact that the employee’s salary is eligible to be subsidised under the JRS.

What steps need to be taken to participate?

Claims are made by way of grant administered by HMRC. The employer will be required to calculate the amounts it is claiming and submit these to HMRC. Claims may only be made, via a new HMRC portal that is being set up, every three weeks. The guidance suggests that in order to claim, employers will need to confirm:

  • their ePAYE reference number;
  • the number of employees furloughed;
  • the claim period (start and end date – the start date presumably being the date of furlough for the initial application and, for any subsequent applications, the day after the end of the period covered by the preceding claim);
  • the amount claimed (per the minimum length of furloughing of 3 weeks);
  • the employer’s bank account number and sort code; and
  • the employer’s contact name and phone number.

As stated above, it will also be necessary for employers to write to every employee who has been furloughed, confirming the furlough and to keep a record of this communication.

Grants will be paid via BACS payments to the employer’s bank account.

The full grant received for the relevant employee’s gross pay must then be paid to the employee, save that PAYE will apply as normal to payments (so that income tax and employee National Insurance contributions will need to be deducted before the payment is made to the employee). As discussed in further detail below, the grant will also cover any employer’s National Insurance contributions payable in respect of the relevant employee’s gross pay, to the extent that pay is covered by the JRS.

Confirmation that all employees can benefit from the JRS

The JRS potentially applies to all furloughed employees, including part-time workers, zero hours workers or others on atypical employment arrangements. It also applies to employees on agency contracts.

The only exception is that the JRS will not apply to furloughed employees who have only come onto their employer’s payroll since 28 February 2020. This appears to be an anti- abuse measure to prevent sham employees from being added to payroll specifically to benefit from the JRS.

This means that employers will need to consider paying furloughed new hires or very recent starters outside the terms of the JRS if they want to provide equal treatment.

Alternatively, these employees could continue in active work (if practicable) or could be made redundant with no entitlement to statutory redundancy pay (although they would still be entitled to any contractual notice pay or severance).

Confirmation that only employees can benefit from the JRS

The JRS does not apply to workers or other self-employed people who provide services to employers, although if individuals are paid through PAYE (and were on the payroll at 28 February 2020) it would appear that they can be covered by the JRS.

Those individuals not covered by the JRS may be covered by the Government’s separate income protection scheme. In light of the suggestion that payments under the self- employed scheme might only begin in June, some businesses may be anxious to assist self- employed people who work closely with them. Care would be needed to ensure that any such assistance does not give rise to employee classification risks. You can read more about these concerns here.

Can you extend the employment of fixed term employees to enable them to benefit from the JRS?

Subject to a narrow exception for recently redundant employees who are re-hired (see further below), subsidised payments cannot be made under the JRS to anyone whose employment has ended.

An employer with employees on fixed term contracts that are shortly to come to an end may therefore choose to extend these arrangements for as long as the JRS is in place to enable them to benefit.  Given that the aim of the JRS is to seek to protect employee earnings, we do not see any reason in principle why an employer and employee cannot legitimately agree to extend an employment relationship even if there is no substantive work for the employee to do (especially given that the guidance makes clear that employees who have recently been made redundant can be re-engaged in order to participate in the JRS). The same would apply to other upcoming termination scenarios – e.g. notice periods that are due to expire or redundancies that were already scheduled to take effect in the coming weeks (although steps would be needed to agree to the withdrawal of any notice of termination).

Confirmation that redundant employees can be re-hired and participate in the JRS

The guidance confirms prior unofficial indications from HM Treasury that employees who have been made redundant since 28 February 2020 can be rehired and then furloughed in order to participate in the JRS. There is no requirement to show that the reason for the redundancy is related to the Covid-19 pandemic. However it is not possible to bring employees made redundant prior to that date within the terms of the JRS.

Rehiring redundant employees raises various employment law questions. Employers will presumably wish employees to repay non- statutory severance payments as a condition of reinstatement. Complications may then arise as to whether the tax and National Insurance contributions paid (if any) on those amounts can be recovered by the employer or employee. If statutory redundancy payments have already been made to the reinstated employees, those employees’ continuity of service for the purposes of any future redundancy payments will have been broken unless they have agreed to repay the statutory redundancy payment.

From an employment perspective, it will be more straightforward to revoke termination notices for anyone whose employment has not yet terminated. This can be done by agreement, which in the circumstances is likely to be straightforward to obtain.

Confirmation that the JRS applies to any employees furloughed since 1 March 2020

The JRS is backdated and covers payments to furloughed employees up to the capped amount for any periods on furlough after 1 March. The JRS cannot be used to cover payments to employees for periods in active employment. Employers who have delayed in furloughing employees may therefore find themselves at a disadvantage. Employers who believe they will need to furlough employees are advised to do so as soon as possible in order to benefit from the Government subsidy.

How long will the JRS run for?

The JRS will initially run for three months from 1 March. This means that, at the moment, employers will not be able to claim wage costs for any period of furlough beyond 31 May 2020. The Chancellor gave a clear signal when he first announced the JRS that the Government would be prepared to extend the duration of the JRS if necessary.

A reminder that employees must be furloughed for the JRS to apply to them

In order for salary payments for employees to be covered under the JRS, employees must not be undertaking any active work. It is therefore not likely to be in the interests of either employer or employee to retain employees on short-time working arrangements unless levels of pay remain higher than the amounts that would be subsidised by the Government under the JRS.

If an employer requires some employees to continue to work part-time but cannot afford to pay at the rates covered by the JRS, it may make sense to furlough some employees and to retain others on full pay (and possibly to rotate between furlough and non-furlough periods for each employee, to achieve fairness and consistency across the workforce).

The guidance makes clear that employees can perform volunteer work or undertake training while on furlough. Although not expressly covered by the guidance, we think employers can also ask employees to attend employee communication calls or to respond to pulse surveys or participate in other “keeping in touch” activities without jeopardising their participation in the JRS. The key principle is that they are not making an economic contribution to their employer.

Can employers still include employees within the JRS if they are aware that they have another job?

The guidance expressly contemplates that individuals may have more than one employment (confirming that employees can be furloughed from more than one job – as each job is separate, and the cap applies to each employer individually). We therefore think that it would be acceptable for an employee to secure alternative income from a second job in what would otherwise have been their spare time without jeopardising the employer’s right to retain the employee within the JRS. However there is a risk that the JRS payments may be at risk if the second job is taking place during time when the core employment would ordinarily have been performed: that would seem to be inconsistent with the continuation of the first employment (which is a prerequisite for participation in the JRS) and inconsistent with the spirit of the JRS.

We do not think any issue would arise if the second role were a voluntary one.

What gets paid under the JRS?

As anticipated, the JRS subsidises the employer for the basic salary of its furloughed employees (plus employer National Insurance contributions and compulsory minimum auto- enrolment contributions in respect of pay covered under the JRS, as described in this briefing).

The JRS does not cover contractual benefits, bonuses or commissions. That means employees whose normal remuneration packages have a high proportion of variable pay may be more significantly impacted.

As announced on 20 March, the JRS will cover 80% of salary costs for each furloughed employee subject to a monthly cap of £2,500 per person. The employer may top-up pay above that amount but is not required to do so in order to participate in the JRS.

How do employers determine what salary is subsidised under the JRS?

For most employees, this will be a straightforward exercise. For full time and part time salaried employees, the JRS will apply in respect of gross basic salary as at 28 February 2020.

Where employees have variable working patterns, the amounts covered by the JRS will be determined by taking the higher of the same month’s earnings for last year and average monthly earnings from the 2019/2020 tax year. If the employee has been in employment for less than a year, the amounts are determined by reference to average monthly earnings since the employment start date (and the requirement for employees who started in February 2020 is to pro-rate their earnings to date). For the avoidance of doubt, although the guidance does not make this explicit, the calculations are clearly determined by reference to basic salary earnings only.

The guidance means that an employee on a zero hours contract (or with significantly fluctuating rates of basic pay) will not be penalised if he or she was only required to work for a short period in the equivalent month last year – the JRS will allow a smoothing of earnings over the whole tax year, or since the employment commencement date if shorter.

What about tax and National Insurance contributions (NICs)? And auto- enrolment pension contributions?

The outline JRS terms did not specify how tax and NICs would be treated. It was always evident though that the payments made by the Government under the JRS would be gross amounts for the employee – and so payments to furloughed employees would be subject to deductions for income tax and employee NICs in the normal way (with those amounts round- tripping back to the Government). This is confirmed by the guidance.

What was not clear from the outline JRS terms was how employer NICs would be treated (and whether employer NIC costs would form part of the capped subsidised payment for each employee, so reducing the amount payable to the employee).

The good news is that the guidance confirms that employer NICs will be funded by the Government under the JRS in addition to the relevant employee’s salary. In other words, even if 80% of a furloughed employee’s salary exceeds £2,500, the employer will be funded to pay £2,500 plus an additional amount equal to the employer NICs arising on that £2,500 payment.

Compulsory minimum auto-enrolment contributions payable by the employer will also be paid by the Government under the JRS in addition to salary and employer NICs. Note that those contributions will be made on the salary actually paid to the employee (and not their pre-furlough salary).

If employers do not top up the salary of furloughed salaries above the 80%/£2,500 cap under the JRS, no tax or NICs ought to be payable in respect of the unpaid salary. Any top-up that is paid will be taxed in the usual way, and the employer will be responsible for meeting the top-up liability (including employer NICs and any auto-enrolment contribution on the top-up).

The guidance suggests that the Government will issue more guidance on how employers should calculate their claims for employer NICs and minimum automatic enrolment employer pension contributions, before the JRS becomes live.

Do employers need to get employee consent to furlough employees and/or to cut pay levels to the amount subsidised by the JRS?

The issue of employee consent is perhaps the most difficult legal consideration for employers under the JRS.  The Government has been clear that introduction of the JRS does not alter underlying employment law, and it is a fundamental principle of UK employment law that amendments to employment contracts require consent. This means that unless the employment contract already reserves an express right to furlough employees, consent is required to implement a furlough programme. Very few contracts make such provision.

In practice, of course, where the employer intends to continue to pay employees the difference between the amounts subsidised under the JRS and the employee’s full salary

pre furlough, there is likely to be little practical risk in imposing the furlough.

But the position is potentially more difficult if the employer is not able to pay the employee’s full salary. The guidance repeatedly points out that employee agreement is required. In the absence of consent, an employee may have a claim for breach of contract or unlawful deduction from wages. Where the workforce is unionised, it may be possible to obtain agreement to the change through normal collective bargaining channels. But employers should expect trade unions to want to ensure that any financial pain is shared and that the workforce as a whole, including in particular management, also take pay cuts.

Large employers which are not unionised are likely to find it practically much more difficult to get express consent, especially if they need it quickly. Inevitably therefore they are likely to need to take a pragmatic approach, most likely one that relies on implied consent to the changes being implemented (in other words that the changes have been introduced openly and transparently, and that employees have not objected, either before or after implementation). This requires as much advance planning and communication as possible, recognising that economic circumstances are likely to require decisions to be taken speedily. Ideally, employees should be given an express opportunity to raise any objections in the course of the communication process. We would expect courts and tribunals to take a pragmatic approach to implied consent in the circumstances.

In many cases, the risk of an employee objection or claim may be low. It is noteworthy that in its guidance to employees on whether they may be covered by the JRS published on 26 March 2020, the Government notes that an employee who refuses to go on furlough is at risk of redundancy or termination of employment. This may act as a significant discouragement to objection by employees.

Care will nevertheless be needed in deciding how to address any objections that are actually received, as there would be clear risks for an employer in imposing a salary cut in the face of material employee objections.

We are aware that some employers have experienced push-back from employees paid materially in the excess of the £2,500 monthly cap under the JRS. This is perhaps not surprising where the employer is unable to top-up the subsidised salary to actual salary levels, given the very significant resulting cut

in take-home pay. Although as a legal matter it might be possible to terminate existing contracts and rehire on revised terms (citing “some other substantial reason” as a defence to any unfair dismissal claim), this is unlikely to be an attractive approach in practice. Most employers in these circumstances are urging senior employees to “set an example”, maybe linked to warnings of redundancy in the event of continuing objections.

Do employers need to consult with employee representatives in connection with the implementation of any furlough arrangements?

The guidance expressly notes that if sufficient numbers of staff are affected, it may be necessary to engage collective consultation processes to procure agreement to changes to terms of employment. This is a reference to statutory rules on collective redundancy consultations, although it is not clear that these rules will apply when furloughing: an employer is not making employees redundant when placing them on furlough (the contract continues with the employee being suspended from active work). However, the obligation to consult might arise if it is clear that employees will be made redundant if they do not accept the furlough terms. An employer should therefore consider carefully its communication strategy around any proposed furlough, the likelihood of employees objecting to the furlough proposal (which may be influenced by whether or not a top-up will be offered) and its ‘plan B’ if employees do object.

Under the collective consultation rules, an employer who is proposing to make 20 or more employees redundant at a single establishment within a 90 day period is required to consult in advance for a minimum of either 30 or 45 days depending on the numbers affected (the time period is 45 days where 100 or more employees are affected).

Non-compliance with collective consultation obligations can result in financial liability of up to 90 days’ pay to the affected employees and criminal liability for the employer if it has failed to file a notification (on form HR1) to BEIS either 30 or 45 days before the first dismissals, depending on the number of dismissals. There is a “special circumstances” defence to both the financial and criminal liabilities, although this is generally narrowly construed. Criminal prosecutions have to date only been brought in particularly egregious cases.

In order to maximise the take-home pay of staff on furlough, can I encourage them to opt-out of pensions auto- enrolment?

Although employers’ minimum auto- enrolment contributions will be funded by the Government in addition to salary under the JRS, the guidance suggests that employees’ auto-enrolment contributions will continue to be deducted in the normal way unless the employee has chosen to opt out. Whilst the contribution would be calculated by reference to the lower salary payments (assuming the employer is not topping up the 80%/£2,500), the fact that the employee continues to contribute will reduce their take-home pay whilst they are furloughed. This may be undesirable for the employee and they may prefer to reduce their pension contribution in the short term.

It is unlawful to induce an employee to opt out of an auto enrolment pension scheme and so careful communication will be required to mitigate this risk. The employer can explain the ability to opt out to the employee, and the consequential impact on pay (and on future retirement savings). Provided it is made clear that the employee has a genuine choice, and the consequences have been clearly explained, the risk of a successful claim for inducing an opt out is probably low in practice. The employer should ensure that any employee who chooses to opt out is given the chance to re-enrol into the pension scheme once they commence work again. The Pensions Regulator has not issued any guidance on this specific point in relation to the JRS.

What about other benefits?

Employees who have been furloughed have the same rights as they did previously. That means all other contractual benefits remain in force, unless amendments to benefit entitlements have been agreed (whether expressly or impliedly) as part of the furlough process. As with employee pension contributions (explored above), employees may wish to consider reducing other benefit-related contributions whilst furloughed (for example, in respect of savings-related share option plans). Whether this can be done will depend on the terms of the relevant benefit plans and applicable tax legislation.

A difficult question arises where the employer is unable or unwilling to top up the salary amounts payable under the JRS. Where, as a consequence of this, the employee’s salary is treated as having been reduced downwards (either by express consent or by implied consent as a result of a failure to object), does this adversely impact the right of employees to benefit to the fullest extent under a salary- related benefit? A particularly important example of this is a life assurance plan. It would clearly be wholly undesirable for the level of life assurance cover to reduce for employees in the middle of the Covid-19 pandemic as a result of an adjustment to their salary. Where express consent is obtained to a salary reduction, it ought to be possible to structure this as a temporary sacrifice or waiver. This should have the effect of preserving the underlying salary for insurance and other relevant purposes. The analysis is a little more difficult where implied consent is being relied on – as a sacrifice or waiver requires an active step to be taken by an employee, and it is harder to show that this has been taken where there has in effect been a unilateral change imposed by the employer to which the employee has not objected.

Nevertheless, we expect that a pragmatic approach is likely to be possible under which a notification by an employer to an employee that he or she will be required to sacrifice or waive excess salary (while preserving underlying basic salary levels), will protect levels of cover under life assurance policies even if the employee has not expressly agreed. Care should be taken in implementing any sacrifice or waiver arrangements to ensure they are efficient from a tax perspective.

Different considerations will apply for those who participate in defined benefit pension arrangements but again the impact of a reduced salary on pension entitlements will need to be considered.

All accrued rights for furloughed employees will be maintained.

Furloughed employees remain in employment and full continuity of service is preserved.

What about holidays?

The Government has not published any guidance on how holidays are to be treated when employees are furloughed. On the basis that individuals remain employed whilst they are furloughed, we would expect them to continue to accrue holiday during the furlough period in the normal way.

If employees elect to take holiday during the furlough period, there is no suggestion that  this would be paid at the pre-furlough rate and, given the current situation, employees may have no desire to take holiday anyway.

To avoid employees eventually returning to work with significant accrued holidays, we expect employers to consider requiring employees to take some holiday whilst furloughed (whether there is a contractual power to do this may depend on the terms of the employment contract). If this is done, there is a risk that it will affect an employee’s status as a furloughed worker and so careful thought is required in advance.

How is sick pay affected?

Employees who are currently sick should not be furloughed but should instead be paid in accordance with employer sick pay arrangements. However the guidance suggests they can be placed on furlough and benefit from the JRS after the end of any statutory sick pay period.

The guidance does not address what the position is in relation to employees in receipt of enhanced contractual sick pay. Arguably those employees also cannot be furloughed until they would otherwise be well enough to return to work (although that does not appear to be the position for those receiving enhanced pay for other types of leave (on which, see below).

Employers in this position should therefore take advice on their specific circumstances.

What about employees on maternity leave?

The guidance confirms that normal rules apply to anyone eligible for Statutory Maternity Pay (SMP) or Maternity Allowance. Relevant individuals are entitled to claim up to 39 weeks of statutory pay or allowance.

Employees who qualify for SMP will remain eligible for 90% of their average weekly earnings in the first 6 weeks, followed by 33 weeks of pay paid at 90% of their average weekly earnings or the statutory flat rate (whichever is lower). The statutory flat rate is currently £148.68 a week, rising to £151.20 a week from April 2020.

The guidance confirms that enhanced (earnings related) contractual pay provided to women on maternity leave count as salary costs that can be claimed through the JRS. It also confirms that the same principles apply where an employee qualifies for contractual adoption, paternity or shared parental pay. This suggests that employees receiving enhanced pay can be furloughed in the same way as other employees. Some careful thought is needed to apply the JRS to employees in this position, so as to manage any discrimination risk.

Can employees on unpaid leave participate in the JRS?

The guidance states that employees on unpaid leave cannot be paid under the JRS unless they have started their period of unpaid leave after 28 February 2020.

What is the position with the National Minimum Wage?

The National Minimum Wage (NMW) does not apply to employees who are furloughed because they are not doing any work. One point the guidance notes is that if employees are required to undertake online training while furloughed (which, as stated above, is permissible under the terms of the JRS), then they should be paid the NMW in respect of time spent doing that training even if that exceeds the amounts subsidised under the JRS.

It should be noted that the NMW will still apply to employees who are not furloughed. If the employer seeks to reduce pay for employees who are continuing to work it will need to ensure that any reduction does not take any employee below NMW level. An employee is in any event unlikely to be willing to continue in active work if they are worse off than they would be if they were furloughed.

Can I participate in the JRS if I only furlough part of my workforce?

Yes, that is permitted. Although the JRS only operates in respect of furloughed employees, an employer can choose to furlough only part of its overall workforce.

Careful thought would need to be given to selection of employees for furlough in these circumstances, particularly where the employer is not proposing to top up the pay of furloughed employees above the capped amount provided for by the JRS. This point is considered further below.

Can employers rotate employees on and off furlough?

We are aware of a number of employers who have been contemplating the introduction of rolling furlough programmes for their employees (or certain groups of them). The guidance confirms that this approach is possible. In order to participate in the JRS, the minimum furlough period will be three weeks (although there is no suggestion that employees can subsequently only be furloughed in blocks of three weeks after the minimum three-week period has been passed). It would not be possible to rotate employees on and off furlough more frequently than once every three weeks.

It would, therefore, be possible for example to run a programme of rolling employees on and off furlough every month – this may be desirable if work levels vary over time or if the employer intends to furlough only a portion of its workforce and wants to ‘spread the pain’ across the workforce over time. How fairly the smoothing can be applied may ultimately depend on how long the JRS needs to remain in place.

Can employers apply selection criteria in determining who to furlough?

Yes. In many cases, it may be self-evident who will be selected for furlough – i.e. because some employees have identified ongoing work whereas others may have nothing to do. But the position may be much more nuanced – for example, because there is only a need for a portion of workers performing a particular function to carry on working.

Where employers are planning to top up pay for all furloughed employees, selection criteria may not be important in terms of legal protection (since no-one will be worse off as a result of furlough, it is unlikely in current circumstances that someone would complain as a result of being asked to perform, or not to perform, work).

In contrast, criteria may be far more significant where selection for furlough may have an impact on levels of pay.  In these circumstances, employers are likely to adopt an approach similar to redundancy selection criteria in making determinations. Wherever possible, it is likely to be a good idea to begin by seeking volunteers (subject to reserving the usual power to refuse to accept particular individuals as volunteers where this would deprive employers of key employees).

Can “being in a risk category” be a legitimate selection criterion for furlough?

The guidance is clear that normal rules relating to non-discrimination apply to the JRS.

There would be a high risk of a discrimination claim if an employer were to select someone in a risk category (e.g. who has a disability or is in an older age group) for capped furlough payments if they are able to work at home.

However, if an employee is required to attend their usual workplace in order to perform their role, we think it ought to be possible to use their membership of a risk category as a selection criterion (indeed employers should positively give consideration to doing this).

Employers owe a duty of care to employees and are also under statutory duties imposed by health and safety at work legislation. In these circumstances, positive steps should be taken to ensure so far as possible that such employees are not exposed to unnecessary risk. We think that furloughing these employees as a protective measure should be acceptable from a discrimination law perspective – employees are not being directly discriminated against on the grounds of age or disability: any age discrimination is indirect and any disability discrimination is for a reason related to disability. In both cases, discrimination on these grounds is capable of justification, and it ought to be possible to justify discrimination where this is to give effect to public health guidance.

How much notice needs to be given to an employee to end the furlough period?

The guidance does not answer this question, but on the basis that employees remain employed whilst furloughed we do not believe that any particular period of notice will be required to end the furlough period. To pre- empt any complaints from employees, it would be sensible to confirm up front that employees may be required to return to work on short notice. We expect that no more than a few days’ notice will be required in most cases (although an employer may want to take into account an employee’s childcare or caring responsibilities in giving notice that they should return to work).