New starters not eligible for furlough – how shall I handle them?

The Government’s new Coronavirus Job Retention Scheme has been set up to help employees who would otherwise be out of a job due to the current health crisis stay in work. Many staff were made redundant before the scheme was announced, so the Government has imposed a requirement that to be eligible for the scheme, a worker must have been on your PAYE scheme by 28 February.

This means that if you’ve already made people redundant, you can rehire them (with continuous service) and put them on furlough from the date they previously left employment. But it also means that if you took on new starters in your business after the cut off date, but before the scheme was announced, they are not eligible to be furloughed (or, if you choose to furlough them, you will not be able to reclaim 80% of their salary from HMRC). It also means that if you have new starters due to join you imminently, you will not be able to furlough them.

So what are your options? You have a number of things you could consider:

 

1. Postpone their start date if they are yet to join you.

You will need to seek their agreement to do this as you are varying the contract, but if the alternative is withdrawal of the offer altogether, they are likely to prefer postponement.

 

2. Withdraw the offer if they haven’t started yet

This is likely to be a breach of contract so you will need to be careful as there is a risk of a claim. You can reduce the risk by paying them any notice pay due to them under the contract if you were to terminate it on day one (possibly a week, or even nothing, as the statutory minimum notice right at the beginning of employment is nothing), and by being clear that this is unavoidable in an attempt to secure the business’s financial viability.

 

3. Dismiss them if they started recently

This feels harsh, but if there is no longer a job for them you may have to terminate their employment. Because they have very short service you do not need to follow a lengthy procedure and the process can be very simple, as long as there is no risk they may feel the dismissal was for a discriminatory reason.

 

4. Offer them unpaid leave

Although the Government won’t refund any of their salary if you furlough someone who joined later than 28 February, that doesn’t stop you placing them on unpaid leave. Again this may be preferable for them than losing the job altogether so they may well agree.

 

If you would like advice on how to address this situation in a lawful way whilst protecting your business, do get in touch.