Childcare, Shielding and Furlough
A very common question raised by both employees and employers alike following the announcement of the third national lockdown in England has been whether (i) parents who stay at home to look after their children following school closures and (ii) those who are shielding in accordance with public health advice can be furloughed under the Coronavirus Job Retention Scheme (“the CJRS”).
The short answer is that, in accordance with the government’s published guidance on the CJRS, employers can, but do not have to, furlough such employees.
However, some of the commentary that we have seen in the media and online has implied, if not expressly stated, that such employees can be furloughed regardless of the circumstances – including where additional labour costs would be incurred (e.g. as a result of temps being engaged or existing staff working extra hours) to perform work in their place.
It would clearly be an abuse of the CJRS to furlough any other employees and engage substitutes especially for the purpose of doing their work. (To be clear, we are not talking about employees who are not furloughed picking up within their normal working hours for no extra pay tasks of the type that could or would have been have been performed by a furloughed employee had they been working – which is certainly permissible.)
In our view an employer will be taking a risk in not applying the same considerations to employees who are staying at home to look after their children or who are shielding, unless and until a further Treasury direction (which sets out the formal rules of the CJRS) is issued, or at least the published guidance on the scheme is amended, to expressly state that this is allowed. (To be clear, the current Treasury direction does not do this, and although the government’s current CJRS guidance for employers and CJRS guidance for employees confirm that such employees can be furloughed, it does not purport that this is regardless of whether the purposes of the scheme are otherwise complied with.)
There are significant consequences for employers who make inappropriate claims under the CJRS. HMRC has made it clear that it will audit claims and that amounts found to have been claimed inappropriately will be required to be repaid – leaving the employer out of pocket at least in this regard (unless it obtained the agreement of relevant employees to recover such sums from them, and they are willing and able to enforce those agreements). Further, employers who are found to have acted deliberately in wrongfully claiming grants under the CJRS are liable to pay a penalty of an amount equal to the sums wrongfully claimed and also face prosecution.