Advice

Advice: Flexible furlough scheme, redundancies and other legal questions answered

Time 1 year ago

Confusion is still rife following the government’s announcement about the £1,000 furlough bonus – and it’s even got legal experts scratching their heads!

Rishi Sunak announced the move in his summer statement, as reported by Car Dealer, saying that businesses bringing back furloughed staff would be paid a £1,000 bonus per employee

Appearing on Car Dealer Live on July 13, Lawgistics legal adviser Nona Bowkis was asked by host James Batchelor what it meant for dealers.


‘As ever, we don’t really know yet. It’s the headlines. People will walk back from furlough and remain in employment through until January. Employers are going to get a £1,000 “Brucie bonus” for doing that [but] we don’t know if that will include people that are already back from furlough or people that are brought back in October when the furlough scheme comes to an end.

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‘They’ve said that it will be towards the end of July before we get any details. But it’s interesting that there are already some companies saying “We don’t want this”, because I think generally people have thought “We don’t see the point of this. We don’t really see the benefit.”

‘Maybe now the government has seen the reaction wasn’t particularly positive they will just change that.’


As she said: ‘Would you keep someone on because you’re going to get a thousand pounds in January when you’ve got to pay them through November, December and January?’

Joining her on the show was fellow legal adviser Kiril Moskovchuk from Lawgistics, which provides specialist motor trade law advice and support to the retail motor industry.

Flexible furlough – how different is it?

Among the questions posed, Moskovchuk answered a commission-based query from a viewer who had his sales staff working on flexible furlough.

He clarified that the flexible furlough scheme was different to the original one, where one of the key conditions was the furloughed staff couldn’t do any work. As such, any work done now under the flexible furlough scheme had to be paid at the national minimum wage level, so if the basic pay falls below that, it’s incumbent upon the employer to top it up to at least the national minimum wage.

Annual leave rules under flexible furlough hadn’t changed much though, he said, with leave still accruing normally.

The only difference – which he said should please dealers – is that under flexible furlough annual leave should be counted as furlough hours, meaning staff on flexible furlough will have 80 per cent of their annual leave paid via the scheme, although the employee will still have to be paid 100 per cent. However, the scheme can’t be used simply to pay for the annual leave.

He stressed that any employees doing work under flexible furlough would need to have a new agreement.

Can employees refuse to be part of the flexible furlough scheme?

Batchelor wondered if people could refuse to work under the flexible furlough scheme, and Bowkis commented that they’d had a number of queries where people were still scared to come back to work, for example because their spouse was an NHS key worker and previously they’d said they couldn’t get childcare.

However, she said the NHS workload had now decreased and with others returning to work, such as childcare professionals, there was no excuse now.

‘The employer needs him back at work – he’s got to come back and work. At the end of the day you’re employed, that’s your contract, and you’ve got to work. There might have been reasons earlier on, but everyone’s kind of going back to work now, the childcare is back out there, the schools are going back, and what would you do normally in the school holidays, for example? Ultimately, you’re employed to do a job and if your employer needs you back, you’ve got to go back to work.’

If they continued to refuse to return to work, it could lead to disciplinary action or even the employer having to ask them if they were therefore leaving.

But she warned: ‘They’re difficult conversations and I wouldn’t recommend anybody does that without talking to us first, just so they don’t drop themselves in a horrible employment tribunal potential hole, because with all of these there are going to be very slightly different facts.’

Can dealers use furlough for notice and redundancy pay? And how do you calculate redundancy pay?

Turning to the topic of redundancies, one viewer who’d had to make some jobs redundant wanted to know if he could use furlough for both notice and redundancy pay.

Bowkis said they’d have to make a distinction between notice pay and payment in lieu of notice, the latter of which couldn’t be claimed via furlough under the Employment Rights Act.

Redundancy pay can’t come out of furlough either – it must come out of company funds. A ‘brilliant’ calculator to help employers work out what to pay people was available on the gov.uk website, she added.

Generally, for people up to the age of 41 it’s a week’s pay for every year they’ve been with the company, and one and a half week’s pay per year for over-41s – and it’s the pre-furlough rate of pay for the last 12 weeks they were working that’s applicable, not the 80 per cent furlough rate. However, people employed for under two years aren’t entitled to a redundancy settlement.

Are test drives allowed?

As far as test drives are concerned and whether or not they should still be unaccompanied, Lawgistics has been taking guidance from driving instructors and examiners, who are in a similar position to sales people, and it was recommended that face masks should be worn but definitely not face shields in case the airbag goes off.

Examiners have to wear a face covering but instructors have the choice, so it comes down to the individual sales staff member to decide if they want to wear a face covering or not. Having the window open where possible was recommended, while the use of recirculated air, eg, via air conditioning, was a no-no. Thorough cleaning after a test drive was also a necessity.


Will face coverings become mandatory?

Would dealers have to change the way they work if it was made compulsory in England to wear face masks in retail spaces including showrooms?

Because there would be fewer people in dealerships than, for example, a food shop, the government was probably going to weigh up the risk to decide if it should be mandatory in dealerships, said Bowkis. But with the government itself seemingly divided as regards retail, a unified message was really needed, especially bearing in mind that there were already different rules for elsewhere in the UK.

Can dealers in local lockdowns carry on working?

Meanwhile, what was the position with local lockdowns, bearing in mind the one that was currently in force in Leicester? Again, there had been confusion from the government, which had said that all non-essential retail had to shut from June 30. In fact, the leicester.gov.uk website clearly states that car showrooms could continue to operate.

‘Each lockdown would probably have slightly different rules,’ said Bowkis. ‘The devil is in the detail as with everything in law really.’

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John Bowman's avatar

John has been with Car Dealer since 2013 after spending 25 years in the newspaper industry as a reporter then a sub-editor/assistant chief sub-editor on regional and national titles. John is chief sub-editor in the editorial department, working on Car Dealer, as well as handling social media.

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