HR people all over the country (and plenty of non-HR people too!) have been desperately trying to work out how the Coronavirus Job Retention Scheme works, how it affects the employment relationship, and battling what has felt like constantly-changing guidance, with information missing and details changing.
But I think an important factor is sometimes being lost in the hunger for information and guidance, and that is the fact that employment law is not governed by HMRC. Furlough is not a ‘thing’ in employment law and the furlough scheme is purely a financial one, whereby HMRC will provide funds to the employer to cover a proportion of wages, under certain conditions.
Whilst getting clarity about some of those conditions has undoubtedly been challenging, I think many are still seeking clarity from HMRC about things that HMRC has nothing to do with. I see people looking to HMRC to state how much employees who are on holiday should be paid, or whether an employer can force an employee on furlough to do training, or a variety of similar issues.
It’s so important to remember that HMRC do not govern the employment relationship, employment rights, or contractual rights and interpretations. Whilst the furlough scheme undoubtedly interacts with the employment relationship, all it means is that HR professionals need to consider the various ways it interacts, and then look to the relevant legislation or case law we already have to guide decision-making.
For example, we have plenty of legislation and case law on how much an employee should be paid while they are on annual leave. The only thing we needed clarity on from HMRC was whether being on annual leave affected furlough and ‘broke’ the three-week minimum furlough period, or whether monies paid during annual leave taken while on furlough did not qualify.
The Treasury Direction containing the conditions of the scheme gives no indication that annual leave affects furlough conditions at all. Therefore, knowing that there is no requirement for the employee not to be on annual leave, an employer should look to its contractual relationship and to employment legislation in order to determine whether to place an employee on annual leave and how much to pay them if they do.
I also see people seeming to throw employment law principles out of the window when it comes to decision-making at the moment, in a cavalier fashion they would not dream of doing under normal circumstances.
In this rapidly-changing climate, with employers clamouring for advice and wanting or needing to take action to preserve their businesses or help struggling employees, it is hard to prevent the panicky atmosphere clouding our thoughts. But it’s crucial to take time to consider all sides, and remember that we already have an employment law framework that guides decision-making and needs to be adhered to.