Faking Furlough
The Guardian Online has reported, a perhaps not so startling statistic for employment lawyers to believe, that two thirds of UK’s furloughed workers have in fact continued working. The survey carried out by economists from the universities of Oxford, Cambridge and Zurich also found that there was a marked difference between how women were treated or possibly less favourably treated compared to men when it came to being placed on furlough or indeed while being furloughed. For example, discrepancies in salary remained a significant feature with 75% of furloughed men having had their salaries topped up from the 80% paid by the government’s CJRS whereas less than two-thirds of women enjoyed this financial benefit.
Of the 63% of furloughed workers who carried on working during furlough, most of whom were men, the reasons for doing so alluded to a kind of deal, particularly where salaries were topped up, as workers felt that they should do at least some work for the top up. This is likely coupled with the fact that employees were rightly worried about losing their jobs so wanted to demonstrate that they are a good worker.
Those continuing to work and those being asked by their employer to work (the latter amounted to approximately 23% of those surveyed), are not simply being a bit sneaky but are breaking the law. The Treasury Direction issued on 22 May 2020 clearly states that under the powers conferred by Section 71 and 76 of The Coronavirus Act 2020, working for your employer or someone connected to your employer directly or indirectly is not allowed. There are further statues that also make this furlough fraud a criminal offence – see Finance Act 2020 .The HMRC have made it clear that they will impose penalties for anyone found to have claimed in circumstances where they were not entitled to claim. There is also a hotline to report employers breaching the rules or a form to complete online. Businesses are under a legal obligation to notify HMRC of any claims made in error.
Looking back on how the coronavirus lockdown was managed the questions some may be asking is whether furlough was a good idea or not? Was it a mistake to forbid employees from working during furlough? Millions of pounds will have been spent by 31 October 2020 propping up a workforce that is ultimately unemployed. Would more businesses have survived the pandemic with a more flexible furlough from the outset? Did furlough just delay the inevitable? Could money have been better spent elsewhere? Whatever the answers are to these questions they will likely be a moot point as it will be the UK taxpayer who will ultimately be paying for the pandemic.
If you are an employee or an employer concerned about whether you have breached the terms of the CJRS or you need advice on an employment law issue please contact Garden House Solicitors today on 01992 422128.