It is clear from the Treasury Direction and the government’s guidance surrounding the Coronavirus Job Retention Scheme (CJRS) that, in order to be eligible, an employee can’t undertake work for or on behalf of the employer’s company – or any organisation associated with the employer’s business – while on furlough. This includes providing services or generating revenue for any such organisation.
But what does this mean in practice? Laura Kearsley, Partner and Solicitor Specialising in Employment Law at Nelsons, answers some FAQs about what employees are and are not allowed to do while furloughed.
Can employees undertake training while furloughed?
“Yes, a furloughed employee can undertake training, for example to maintain their skill set or upskill themselves, as long as this does not provide services to or generate revenue for the employer that has placed them on furlough.
“If an employee is required to undertake any training while furloughed, for example to complete an online course, they must be paid the relevant national minimum wage in respect of any time spent training, even if this is more than 80% of their wage, as this qualifies as working time for the purposes of the legislation. This may mean that employers are not able to reclaim the total amount paid to employees in respect of periods spent training.”
Can employees carry out volunteer work while furloughed?
“Yes, a furloughed employee is entitled to take part in volunteer work while furloughed, including volunteer work that has been organised by the employer that has furloughed them. Again, this is as long as this does not provide services to or generate revenue for the employer.”
Can a furloughed employee participate in promotional activity while on furlough leave?
“No, unlike volunteer work, marketing activity is ordinarily carried out with the purpose of generating revenue for the furloughing employer.”
Can an employer make contact with furloughed employees generally?
“The government guidance is silent on this issue. However, it’s understandable that most employers will want to keep in touch with their employees during furlough from a relations point of view.
“Nelsons’ view is that employers can, and should, maintain contact with employees during furlough to keep them in the loop and provide them with any important updates on how the business is operating and reassure them that they have not been forgotten about.
“ACAS guidance recommends that any furlough agreement sets out how to keep in contact during furlough, which supports the view that general contact should be maintained. Therefore, employees may be able to be involved in social and charitable events, be informed and consulted with about changes happening within the business and take part in HR matters, such as giving evidence in disciplinary proceedings.
“On Friday, 1 May, government guidance was updated to confirm that while on furlough, an employee is still permitted to undertake union or non-union representative duties and activities for the purposes of individual or collective representation of employees or other workers. This is as long as they do not provide services to or generate revenue for or on behalf of the furloughed employer or any linked or associated organisation.”
Can an employer require employees to attend business meetings or check emails while furloughed?
“No, on the basis that this would arguably amount to providing services to the furloughing employer. Regarding emails, there is also a risk that employees would respond to emails received or action its contents, which would be a breach of the CJRS even if an employee replied to just one email.
“We would suggest employers consider setting up automatic forwarding of emails or permit a line manager to have access to the email inbox for the period of furlough to minimise this risk.”
Can employers require employees to undertake a handover of their duties while furloughed?
“We would recommend that employers speak to the team members they wish to furlough at the point of furloughing them regarding the employee’s current workload and tasks that need to be completed in order to handover fully.
“There is a risk that providing handover information while an employee is furloughed will amount to providing services to the organisation or even generating revenue for the organisation, which would be in breach of the CJRS.”
What if an employer urgently needs employees to carry out work but they are currently furloughed?
“If an employer needs certain work carrying out that a furloughed employee would usually undertake, and there is no one else working within the organisation that can assist or pick up the work in the absence of that person, they have the option of taking that employee off furlough after a minimum period of three consecutive weeks. The employee could then carry out the work required and be re-furloughed afterwards.
“The government guidance does not provide for any minimum periods that an employee must be back at work for before being eligible to be re-furloughed, and so arguably, an employee can be taken off furlough for a day or two days, and then be re-furloughed.
“Employers can choose to and operate a ‘roll off, roll on’ system and rotate employees. If they do this, they will need to ensure that written records are in place documenting periods during which an employee is on furlough and not on furlough and keep these for five years in accordance with the CJRS.”
What are the consequences of allowing or requiring employees to work while furloughed?
“If an employer asks its employees to carry out work while on furlough, the employer will be jeopardising its right to claim back the workers’ wages.
“In addition, if employees carry out work for their employer that is not permitted under the CJRS, this is likely to be viewed as ‘breaking’ the period of furlough. If employees have been furloughed for less than three weeks at that point, this will mean the requirement for employees to be furloughed for a minimum consecutive three-week period will not have been satisfied and the employer will be unable to claim for wages in respect of any of that period of furlough.
“HMRC has the right to retrospectively audit all aspects of any claim under the CJRS. There is a real risk that if it comes to light that an employer has claimed wages in respect of a ‘furloughed’ employee who was still carrying out work while furloughed, the employer will be held to be in breach of the CJRS and liable to repay any monies paid either during that period or any monies paid under the CJRS at all.
“A breach of the CJRS will only affect employees (in monetary terms) if the furlough agreement between the employer and the employee contains terms providing that the employee has to repay monies received during any period of furlough in the event that HMRC withholds monies or requires repayment. If the furlough agreement does not contain such a term, technically the employee will not have to reimburse the employer for monies paid while on furlough in order for the employer to then reimburse HMRC.”
Who will find out if employers are asking their employees to do work?
“The Treasury Direction makes it very clear that a CJRS claim cannot be made in respect of an employee if it is abusive or contrary to the purpose of the CJRS. It is arguable that claiming wages in respect of an employee who is still carrying out work that is not permitted under the CJRS would amount to an abuse.
“As above, HMRC has the right to audit claims and the government guidance states that payments may be withheld or need to be repaid in full to HMRC if any claim is found to be fraudulent or based on dishonest or inaccurate information.
“HMRC has put in place an online portal for the public and employees to report suspected fraud in the CJRS and this is encouraged.”
Can an employee be disciplined for refusing to work while furloughed?
“No, and it would be unreasonable for an employer to proceed to subject an employee to disciplinary proceedings while furloughed for this reason. The employer has to have offered furlough to an employee for them to be able to be furloughed, and that offer is made in the knowledge of the rules of the scheme which, among other things, prohibit an employee from carrying out work.
“A furloughed employee is not absent without leave and it is difficult to identify how an employer might frame a refusal to work while furloughed as misconduct when this is in accordance with the rules of the CJRS.”
What if the employee is conscientious and does work without the employer requiring that?
“If an employee carries out work without the employer requiring this or knowing the work was being carried out, this could still amount to providing services and/or generating revenue for or on behalf of the organisation and prejudice the employer’s ability to claim wages under the CJRS.
“As previously mentioned, in order for an employer to keep control and check over what an employee is or is not doing while furloughed, we would recommend considering revoking access to work emails for those that are furloughed and making it clear in the furlough agreement that an employee is not permitted to carry out work while furloughed to minimise this risk.”
What about working for another employer while furloughed?
“The government’s guidance confirms that an employee who has been furloughed from their current job can take on a new job, provided this is permitted by their contract of employment. For example, certain contracts of employment will state that an employee must not work for another employer during the course of their employment with the organisation during working hours or without prior written consent.
“If this is the case, we would recommend that parties agree a variation to the terms of the contract in writing on a temporary basis or that the employer provides that written consent, specifying that this only applies in relation to any period of furlough while the coronavirus pandemic is ongoing.
“It is worth noting that there is no obligation on an employer to permit an employee to work for another employer while furloughed if this is prohibited by the contract of employment, although the employee would have a valid argument that any alternative work would not be interfering with their work for the furloughed employer, as no such work is required.”
For more information on how Nelsons can support your business, please visit www.nelsons.co.uk/managing-your-workforce.
For the latest government advice on coronavirus, please visit www.gov.uk/guidance/coronavirus-covid-19-information-for-the-public.
