Insights overview

Methods to Unfurlough

With the UK cautiously moving past the peak of the coronavirus pandemic, many businesses are beginning to tackle the difficult questions of how, and when, to return to work. For many employers this will involve unfurloughing those employees whose wages are currently being claimed under Coronavirus Job Retention Scheme (CJRS).

When to unfurlough?

The gradual easing of lockdown restrictions will enable many businesses to re-open all or part of their operations – and therefore to begin unfurloughing employees – before the official end of the CJRS scheme (particularly now this has been extended to October 2020). For others, the scheme may not unwind with business need and they may need to wait before bringing staff back to work.

Deciding whether to unfurlough staff before the end of the CJRS will involve careful judgment, not only of whether there will be sufficient business income to support the returning workforce, but also whether it is possible to implement adequate processes to protect the health and safety of those returning to the workplace (for more information on this see our recent webinar here.

How to unfurlough?

As with furloughing, ‘unfurloughing’ is a brand-new concept and there is no specific guidance on what process an employer should follow to end any period of furlough. However, given the similarity to lay-off, it would be sensible to follow the same principles as when ending a period of lay off.

Many furlough agreements will give the employer the right to bring the furlough to an end by giving notice. The length of any notice may be specified (for example, one week), but where it is not reasonable notice should be given. In circumstances where the furlough agreement does not include a mechanism to bring an employee back before the end of the CJRS, the agreement of the employee should be sought to bring the agreement to an early end.

As with furloughing, clear written records should be kept of any unfurloughing decisions.

Who to unfurlough?

Where an employer is seeking to unfurlough some staff before the end of the CJRS, deciding who should return first and who should remain on the CJRS presents a potential headache. Careful consideration should be given as to how to select employees to unfurlough, bearing in mind any potential discrimination or procedural/ fairness issues – particularly if there could be consequences for pay or long-term employment prospects.

The rules of the CJRS state that the minimum period of furlough is three weeks. Therefore, where an employer seeks to unfurlough staff who have been furloughed for less than 3 weeks, they will not be able to claim the grant under the CJRS for 80% of pay (up to a maximum of £2,500) for the time the staff have been furloughed. Therefore, if an employer wishes to claim the grant, they will need to let the furlough continue until the staff have been away for 3 weeks. Where staff are needed in the business, employers may still unfurlough them, but would not be able to claim the grant.

In the same way as choosing employees to be furloughed, selecting staff to be unfurloughed should be conducted using fair and objective criteria. Two key methods are as follows:

Asking for volunteers – this is a straightforward method allowing those who are most keen to return to volunteer to come back first. This is likely to be most suitable where a certain number of employees are needed from a pool of staff who perform the same role. However, it is unlikely that this approach could be implemented across the board as businesses may need some specialist or business critical roles to return, regardless of the willingness of the employee to be unfurloughed. Therefore, employers are also likely to need to operate one of the other methods of selection.
Selection based on skills/experience/business need – similar to redundancy selection scoring exercise, employees could be selected to return based on the need of the business for their particular skills or experience. A skills and experience scoring matrix could be developed for each area of the business due to re-open, with each member of staff in that area being graded according to those skills and experience. Staff with the highest scores would unfurloughed first. Employers will need to be careful to use fair and objective selection criteria in order to avoid allegations that the selection process was marred by subjective or discriminatory bias.

Employers are likely to need to use a combination of methods to unfurlough staff. Employers should be prepared to be flexible about those who are selected and consider requests to return or stay at home on a case by case basis. For example, it may be possible to agree for a selected employee who would prefer to remain on furlough because of caring responsibilities to ‘swap’ with an employee who wasn’t selected but wants to return for financial reasons. To mitigate discrimination risks, we suggest that any communications to staff also include an invitation to make contact if they want to express an opinion on the decision to unfurlough them, or not to unfurlough them.

There may be other selection issues which employers should consider. For example, where employees are vulnerable, shielding or have caring responsibilities, they should remain on furlough/at home. Unfurloughing these employees would not achieve the objective of returning them to work as they would need to commence another type of absence (e.g. sickness absence or dependent care leave). However, where an employee claims they are unable to return for one of these reasons, it would be reasonable for an employer in such a situation to take reasonable steps to satisfy themselves that the reason given is true.

Extension to the CJRS

The government has now confirmed that the furlough scheme will be extended to the end of October 2020. Importantly, employees will also be permitted to return to work in some capacity from August onwards, with employers being required to cover some proportion of the cost of this. This is likely to affect the unfurloughing plans of many employers, who may now consider extending furlough for some employees or switching to a phased, rather than full, return for others. Whilst we await the full details of the changes to the scheme towards the end of this month, it is still prudent for businesses to begin considering now what their unfurlough strategy may look like.