It has been reported that Sports Direct and House of Fraser have been asking their store managers to work at least one day a week whilst being on furlough leave, in breach of the rules of the Coronavirus Job Retention Scheme (CJRS).
The Guardian reported that staff members alleged they had been asked to volunteer to go into stores to work once a week, with two managers from Sports Direct adding that they had been told not to clock on when they began work. A large number of Sports Direct and House of Fraser staff were placed on furlough in April.
It was also reported that store managers had been asked to return to work on Monday 4th May on reduced pay (90% of their usual earnings) but Sports Direct and House of Fraser reversed this decision over the weekend after details of the plan were published by the newspaper.
Working while on furlough
As we previously wrote, the Treasury Direction and the Government’s guidance surrounding the CJRS states that, in order to be eligible to be claimed for under the Scheme, an employee cannot undertake work for or on behalf of an employer’s organisation, or any organisation linked or associated with an employer’s organisation whilst on furlough. This includes providing services or generating revenue for that business.
If a company asks its staff members to carry out work whilst on furlough, the employer will be jeopardising their right to claim back the wages from the Government in respect of those employees that are undertaking work during that period.
If employees carry out work for their employer that is not permitted under the CJRS, this is likely to be viewed as ‘breaking’ the period of furlough. If employees have been furloughed for less than three weeks at that point, this will mean that the requirement for employees to be furloughed for a minimum consecutive three week period will not have been satisfied and the employer will be unable to claim for wages in respect of any of that period of furlough.
HMRC has the right to retrospectively audit all aspects of any claim under the CJRS and there is a real risk that if it comes to light that an employer, such as Sports Direct or House of Fraser, has claimed wages in respect of a ‘furloughed’ employee who was still carrying out work whilst furloughed, the employer will be held to be in breach of the CJRS and liable to repay any monies paid either during that period or any monies paid under the CJRS at all.
Although the Government guidance on the CJRS has been amended numerous times and many employers have struggled to keep up, it is clear that furlough is not intended to cover the salaries of staff who are still undertaking work.
For further reading on what employees can and cannot do during furlough, please see our blog.