does the furlough scheme discriminate?
Cast your mind back to the early days of lockdown in March 2020. The world was a strange place, with eerily deserted streets dappled in unseasonal Spring sunshine. Many of us were realising at first hand the horrors of trying to work and educate small children within a confined space. And the Chancellor Rishi Sunak gave us a new word, ‘Furlough’, to describe a scheme in which the government pays business to pay staff 80% of their salary not to go to work.
When the Furlough scheme was announced it was originally intended to be a short-term fix to get the country through what was assumed to be a one-off lockdown. It was broadly welcomed by both industry and the trade unions and is widely credited for averting the kind of economic meltdown which may have occurred if market forces were allowed to run riot at the peak of the pandemic.
Like many intended short term political fixes it is still with us. The Furlough scheme has been extended on at least 4 occasions as the pandemic has gone through its painful evolution from first phase to second phase to the current vaccine induced lull. The high point of the scheme was on 8 May 2020 when 8.9 million of us were on Furlough. There were still 4.7m million employees using the scheme on 31 January 2021 at the peak of the second wave. The current version of Furlough is due to end on 30 September 2021 although it will become progressively less attractive to employers from 1July onwards as they will be required to make financial contributions to staff salaries.
So Furlough is still with us with and will be for at least another 4 months. This may be a depressing prospect for those who are still outside of the workforce in a limbo position on reduced pay. Furlough workers are also thought to be particularly vulnerable to redundancy when they do return to work as in many cases their extended absence will have convinced employers that they can do without them.
What is interesting and perhaps under-appreciated about Furlough is its equalities impact. Recent figures from the Office of National Statistics reflecting the Furlough picture at the end of February 2021 show that the Furlough scheme disproportionately impacts upon women and younger people.
Although women make up less than 47% of the workforce they make up more than 52% of the total employees who were registered as being on Furlough. The figures are even more pronounced in relation to age. In age groups from 40 upwards the percentage of employees being put on Furlough leave is consistent at around 13%. That increases to 14% for age 30-39, to 15% for age 25-29, to 21% for age 18-24, and to 33.5% for under-18s.
If you want to avoid being Furloughed the very worst thing to be is a young woman with a remarkable 39% of women under the age of 18 put on Furlough leave.
Will all of this result in employment tribunal claims? It is currently too soon to tell. The tribunal system is currently operating at a slow pace and there are very few first instance decisions which post-date the Furlough scheme. However there is plainly the potential for claims if employees can show that their selection was related to their age or gender.
The best advice for employers is to be careful in Furlough selections and only make use of the scheme where you absolutely need to. The current scheme gives the option of employees being Furloughed on a part-time basis and for Furlough leave to be spread out between staff. These are options that employers should consider ensuring that the burden of Furlough is equally shared.
This blog was prepared by Mark Alaszewski, Employment Solicitor, didlaw.