NB THIS POST SHOULD BE READ IN CONJUNCTION WITH ROSIE’S UPDATED POST ON THE LATEST GOVERNMENT ANNOUNCEMENT – AVAILABLE HERE.
This is an extremely challenging time for employment lawyers. This is the first in a series where the employment team at Kings Chambers will address issues that are arising as a result of the Coronavirus crisis. Here Rosie Kight considers the question of whether an “ex-employee” can be re-employed.
“Our employee resigned after 28 February 2020, his employment ended and now they have asked us to re-hire them. If we do, can we furlough them?”
THE EMPLOYER’S DILEMMA
This is a tricky situation and it is understandable to empathise with individuals who have found themselves in this position. Whilst you are of course able to re-hire them, you are not required to.
The current HMRC guidance specifically states that employees who were made redundant after 28.02.2020 can be re-hired and furloughed. This seeks to achieve the government’s aim of reducing the number of redundancies/unemployed as a direct result of CV-19.
Although arguably your scenario may have arisen as a direct result of the crisis as well, there is no reference in the guidance to any other form of termination of employment and re-hiring falling within the scope of the scheme. In fact the HMRC guidance expressly excludes employees hired after 28.02.2020 from being furloughed and being eligible for the scheme and it does not make clear whether that covers entirely new hires or former employees or both. So for these purposes the safest assumption is that the exclusion covers both.
So, think very carefully before deciding how to proceed, because there is a high chance that if you do re-hire you will not be able to recover the salary costs (up to the relevant cap) from the scheme.
What is your rationale for thinking of re-hiring him? Depending upon his reasons for resigning, you may think that there is scope to convince him to stay on beyond the current crisis and it is therefore worthwhile commercially. However, what would the impact be (both operationally and on other staff) if you did re-hire him as a gesture of goodwill, only for him to leave as soon as he could thereafter? Bear this in mind before making a decision.
1 – Decline his/her request, explaining that there would be no work for him to do at the moment if they were re-hired and it would not be possible, in line with the current guidance, for them to be furloughed. Point them towards the possibility of applying for universal credit if they are unable to work elsewhere.
2 – Re-hire them, pay them and provide them with work to do (subject of course to the government guidance on essential travel/social distancing).
3 – Offer to re-hire them and agree that you will pay them to essentially stay at home until there is work for them to do, knowing that you are unlikely to be eligible to recover the salary costs from the government scheme. You can of course agree what the level of pay would be for him as a new employment, but bear in mind the NMW provisions (and/or any applicable collective agreements which would apply to him in the role they are being employed into).