Guidance and Legislation

There was guidance in some quantity this month with the publication on 12 June of five amended and three new pieces of guidance on the new flexible furlough scheme, and subsequently the Treasury also issued a modified Treasury Direction to take this into account.  See New and updated guidance on flexible furlough for more details.

The new guidance included confirmation that parents returning to work from statutory maternity, paternity, shared parental, adoption or parental bereavement leave would still be eligible for furlough even if they returned after 10 June (and therefore could not comply with the requirement to have been furloughed for a full three-week period prior to 1 July, which is necessary to be eligible for flexible furlough).  On 19 July the Check which employees you can put on furlough to use the Coronavirus Job Retention Scheme guidance was updated again to make a similar provision for military reservists returning from a period of mobilisation after 10 June.

The Information Commissioner's Office has published further guidance on the use of personal information by employers as businesses start to reopen.  The message is that data protection does not stop employers asking whether employees are experiencing any COVID-19 symptoms or introducing testing as long as data protection principles - transparency, fairness and proportionality - are applied.  The guidance sets out six key steps that organisations need to consider around the use of personal information:-

• Only collect and use when necessary;
• Keep it to a minimum;
• Be clear, open and honest with staff about data;
• Treat people fairly;
• Keep people's information secure; and
• Staff must be able to exercise their information rights.

HMRC has published a tax information and impact note confirming that individuals who are furloughed or who have had their working hours reduced below the current statutory working time requirement for Enterprise Management Incentive Share Schemes ("EMI") as result of COVID-19 will retain the tax advantages of the scheme.  Currently participants in EMI schemes are required to meet a statutory minimum time commitment to the employer equal to or exceeding 25 hours per week, or if less, 75% of their working time. A failure to meet the minimum requirement is a "disqualifying event" meaning the options must be exercised where permitted within 90 days for the tax relief to apply. ITEPA 2003 will be modified by the Finance Bill 2020 introducing a time limited exception for employees who are unable to meet the minimum required hours. 

News

The flexible furlough scheme has brought out the good and the bad in businesses, though the press have unsurprisingly focussed on the bad - specifically the apparent high number of cases of furlough fraud with nearly 2000 reports being made to HMRC by early June.  Employers are though being given the chance to confess to furlough abuse.  Draft legislation giving HMRC powers to charge a penalty where a person deliberately makes an incorrect CJRS or SEISS claim, or where a person who has claimed a CJRS payment deliberately does not use it for the costs it was intended to reimburse, was rushed through Parliament in June. However, the penalty will only apply if the person fails to notify HMRC about the situation within 30 days giving employers a window in which to confess. 

The good however is that more and more businesses are choosing to repay CJRS funds.  Be that because their businesses have fared better than expected during lockdown or, for those who are imminently due to announce year-end financial performance, they have the quandary of being seen to have had a strong 2019/20 while still making use of public funds. It seems likely that more businesses will follow the likes of IKEA, the Telegraph, Spectator magazine, Taylor Wimpey, Scottish Sea Farms and Games Workshop in either not claiming for furloughed staff,or repaying the grant to HMRC.

Initial cost estimates of furlough have also been reduced, with the Office for Budget Responsibility revising its overall estimated cost down 30% from £84bn to £60bn.  OBR suggests that the lower costs are down to employers predominantly using the scheme to furlough staff who worked part-time or were below the average hourly pay.  This conclusion further supports arguments that it is the low paid and women who have been hit hardest by the pandemic.

According to a Women's Equality Briefing published by the TUC, new and expectant mums have been particularly badly affected by the health and economic impacts of the coronavirus crisis.  A survey of 3,400 pregnant women and mums on maternity leave showed that (1) 25% had experienced unfair or discriminatory treatment at work, (2) that pregnant women's health and safety rights were being routinely disregarded, (3) that low paid pregnant women were twice as likely as women on medium to high incomes to have lost pay or been forced to stop work, and (4) that 71% of mums who were surveyed who were planning to return to work in the next three months were currently unable to find childcare to enable them to do so.

Unsurprisingly, many employees want to maintain flexible working arrangements after lockdown finishes.  A survey by Working Families has found that more than 90% of working parents and carers want their workplace to retain flexible working post COVID-19.  They called on the UK Government (1) to act on previous commitments to ensure employers are advertising jobs flexibly as the norm wherever possible, (2) to help ensure employers are taking a strategic, organisation-wide approach to better job design, (3) to reform the statutory right to request flexible working and (4) to ensure all parents and carers have access to secure jobs with guaranteed predictable hours and access to all employment rights.  Introducing the right to request more predictable contracts, introducing an entitlement to one week's leave for unpaid carers and making flexible working the default position (the latter being subject to consultation) are key features of the Employment Bill that was introduced in the Queens Speech in December 2019.

A four day working week has been proposed as a "powerful tool" to recover from the COVID-19 crisis by a group of cross-party MPs.  The MPs have written to Chancellor Rishi Sunak asking him to set up a commission in England to explore the option.  In Scotland the measure is already being considered by the newly-formed Post-Covid-19 Futures Commission which aims to return Scotland to "better than usual" rather than "business as usual" post pandemic.