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The Future of Furlough and other employment issues arising from Covid-19

Adrian Fryer

The Coronavirus Job Retention Scheme (“Furlough Scheme”) has been a lifeline to many employers during the Covid-19 pandemic, allowing businesses to retain employees that would have otherwise faced redundancy, but the scheme is now winding down and the Government is encouraging employees back to work with the lifting of the last restrictions from 19 July 2021. The return to work and the winding down of the furlough scheme however mean that business will face new challenges.

The Future of the Furlough Scheme

From 1 July 2021, the Government has reduced the level of its contribution to the wages of furloughed employees in an effort to wind down the furlough scheme and to encourage a return to the workplace.

The Government contribution has been reduced from 80% to 70% of wages (capped at £2,197.50 per month) for the hours that employees are furloughed. The Government have made it clear within their guidance that the employer must continue to at least top up the employee salary to the full 80% therefore requiring in July 2021 an employer contribution of at least 10%. Employers are not permitted to request employees to accept a reduction to 70% of their wages.

From 1 August 2021 until the Furlough Scheme’s planned end date on 30 September the Government contributions will reduce to 60% of wages (capped at £1,875 per month) and the remaining 20% must be topped up by the employer.

There have been calls from some industries for an extension of the scheme but in light of the recent announcements and the move to stage 4 in the Government’s lockdown plan it is unlikely any further extensions will be announced.

Which employees are still eligible for the Furlough Scheme?

For any period on or after 1 May 2021, an employer can make a claim for furlough as long as the employee was employed on 2 March 2021 and a PAYE Real Time Information (RTI) submission was made to HMRC between 20 March 2020 and 02 March 2021.

Employers do not need to have previously claimed for an employee before the 2 March 2021 to claim for periods starting on or after 01 May 2021.

A return to the workplace

A question facing many employers now is what does a return to the workplace look like, and how will this operate in practice?

  • Can an employer continue to enforce the use of face coverings at work?

From 19 July 2021 the legal requirement to wear face coverings was lifted; however, the Government has made it clear that they expect and recommend that people will continue wear face coverings in crowded areas.

So, although the legal requirement to wear a face mask has been lifted it is still recommended as means of protection from the virus. As such it would be at the employer’s discretion as to whether or not they continue to implement the requirement to wear face coverings.

Employers should be aware of their duty of care to employees and their responsibility to ensure a Covid secure workplace when making decisions on the use of face coverings.

If employers take the decision to continue with compulsory face coverings, then they should make sure that there is an exception to this for those who are medically exempt.

  • Can an employer require employees to have the vaccine?

The short answer is no, but employees may be putting their jobs at risk if their employer decides to introduce a mandatory vaccine policy amongst its staff and they refuse to be vaccinated.

Some employers may decide to make vaccines mandatory if it is deemed necessary for operational or safety reasons within their business. This is likely to be limited to certain sectors or occupations, but employees may risk dismissal if they flout a mandatory vaccine requirement where such a policy is justified because of the nature of their job. Similarly, employers in such circumstances may also make vaccines mandatory for new recruits so that it would be a condition of them being offered the job.

If any employers are considering implementing a mandatory vaccine policy or treating employees and/or job applicants differently because of their vaccination status, they are urged to seek legal advice to avoid facing unfair dismissal claims and claims under the Equality Act 2010, which raises the prospect of uncapped awards.

The Government has, in fact, announced that people working in care homes in England must be fully vaccinated against Covid from October 2021, unless they are medically exempt. The mandatory vaccine requirement is expected to become law and will be applicable to anyone working in a registered care home providing nursing or personal care, whether employed directly by the care home provider or by an agency. The Government will also consult on whether this requirement should be extended in due course to anybody working in a care or health setting.

  • When are employees required to self-isolate and are there any exceptions?

From 22 July 2021 employers are able to apply for a limited number of named workers (who are fully vaccinated and 14 days post-final dose) to be able to leave self-isolation under specific controls for the purpose of undertaking critical work only.

This policy only applies to employers who have received a letter from a government department and in specific areas of industry including (but not limited to) energy, water, border control, transport and emergency services. The Government has made it clear that this is not a blanket exemption for all workers in these sectors.

Form 16 August 2021, those who have been fully vaccinated for more than 2 weeks will no longer have to self-isolate if a close contact tests positive for Covid-19. If the individual is identified by NHS test and Trace, they will be asked to take one PCR test to make sure that they haven’t become infected. If they test positive, they will need to self-isolate.

Anyone who has not been double vaccinated must continue to comply with the self-isolation rules until further notice.

  • Can employers still require mandatory testing?

Yes, however employers must be cautious of implementing a blanket requirement for mandatory testing.

Although requiring mandatory testing is not as invasive as requiring a vaccine, employers must still allow for flexibility on their mandatory testing policy to take account of situations where the person was not willing to take the test, specifically if this was on medical or religious grounds. Employers are advised to review this on a case-by-case basis to avoid discrimination claims.

Employers may want to rely on the argument that workplace testing is a lawful/reasonable management instruction and discipline any employees who refuse to take a test. The question of whether it will be reasonable to require testing will vary depending on the workplace and the risk of Covid-19 in that environment.

Employers should therefore formulate a clear policy and seek independent legal advice before commencing disciplinary action against current employees. Please do get in touch if you want to chat through your situation.

Adrian Fryer, Partner & Head of Employment

t: 0151 224 0539