It has been found that the system of the Coronavirus Job Retention Scheme (the Scheme) which was meant to support businesses during these difficult times has been very open to abuse by employers and businesses.
A survey found that more than a third of the furloughed employees have been asked by their employers to continue work or to at least carry out some tasks during the furlough period with at least 29% of the respondents being asked to undertake more administrative tasks during that time.
Of course, this is against the rules of the Scheme as it is not permitted for employees to undertake any profit-gaining work for the employer whilst on furlough.
Employees have spoken against the request to continue working whilst on furlough although we have no doubt that many have been kept quiet due to fear of repercussions from their employers. Indeed, HMRC have reported to the BBC that they received more than 3,000 reports of abuse of the Scheme since April. We wrote about the new powers that will be introduced to allow HMRC to reclaim the funds paid and it is important that companies bear that in mind. Equally, employees can continue to make reports to HMRC if they feel that it is necessary because their employers have asked them to continue to work.
This is the tip of the iceberg with the criticism that is currently ongoing with companies that have taken advantage of the scheme to pay their furloughed employees whilst making big pay-outs to their executives. For example, reports suggest that Ladbrokes have furloughed all of their 14,000 employees and have claimed for them under the Scheme, topping up their wages, but at the same time have paid out approximately £5 million to their executives in share bonuses.
There is a lot of scrutiny for companies out there and we continue to advise our clients to take the Scheme and its rules seriously but utilise it where appropriate to assist the business. If you have any questions, please do not hesitate to contact our expert team here at Gepp Solicitors.