The Lesser Evil: Why Workers Accept Furlough.

“Furlough” is quite the buzzword these days. As soon as COVID-19’s effects on  business and employment became clear, agile professionals from Ghana to Kenya, Nigeria to  South Africa, with an interest in employment, read up on the furlough and adapted it to local  conditions and advised client-employers. This has been nothing short of impressive.  Furloughing is essentially an Americanism. For many legal systems like England and countries  with similar legal systems (like most of the countries mentioned above), it has been a post COVID-19 phenomenon. What does it really mean? Basically, it is when the employer asks the  worker to go on a period of unpaid leave because circumstances beyond the employer’s  control prevents the employer from paying the worker.

The situation is usually such that if the  workers object, the only realistic alternative is to terminate their employment. The pervasive  reach of COVID-19 (across the world and into corporate and individual pockets) means the  temptation or need to furlough workers has touched many an employment in far-flung places,  including Africa where many employment lawyers report that clients are very interested in what menu of options they have in changing their financial relationship with workers until the effects of the pandemic are reversed. The common questions have been about  reduced pay, compulsory annual leave, indefinite leave without pay (that is the furlough, really), redundancy and termination (by frustration). 

“SUBJECT TO THE LAW”  

The existing employment law must obviously permit any kind of change an employer wishes to make to the employment contract.  Otherwise the change would be unlawful. So already existing legislation or the employment contract must permit furloughing, if one is being strict about it. But, in many cases and in many countries, there was no existing law even remotely touching on furloughing when COVID-19 crossed their borders. Practical advice has been given to many an employer that they can furlough workers if the business will collapse without it, and if they follow certain risk-reducing steps. It has been suggested that, with no existing ‘furlough’ laws, furloughing “subject to existing law” should be interpreted to mean furloughing must be done fairly and without discrimination. It remains to be seen if the court and employment tribunals will accept this interpretation.

 SUGAR-COATING THE PILL 

To make an act which is not necessarily lawful more acceptable, some governments of richer  countries have acted to soften the blow by stepping in the employer’s shoes to pay up to a  certain percentage of the worker’s salary during the furlough period. For example, the  British government is paying up to 80 percent of the salaries of some furloughed workers  up to a maximum of 2,500 pounds. Even with that, employers and workers (or workers’  representatives) have held consultations and negotiations prior to the furlough. But not all  economies can support this soft landing. Most African countries will not be able to do this.  Where the governments do not have the sugar to sweeten the bitter pill, employers have  more reason to consult and negotiate. Workers are more sensible and considerate than they  get credit for.They have seen the havoc COVID-19 has wreaked on businesses. They are likely to negotiate  and accept some kind of furlough (even if the government is not guaranteeing part of their  salary).  

DISSENTIENT WORKERS  

What if the workers do not agree to be furloughed? If the employer forges ahead with it,  the workers may have a claim of constructive termination against the employer (on the  ground the employer has created a hostile work environment, leaving the worker with no  choice but to resign). Would a practical-minded employment tribunal ignore the global viral  war which has forced economic hardship on businesses? Will it ignore the fairness in this  not necessarily lawful event? Would the tribunals accept that “subject to existing law” must  be taken to mean fair and non-discriminatory? Would the fact of the prior consultations  mitigate the necessary sin and lesser evil (when the alternative was termination)?  

CONCLUSION  

A well-structured and compassionate furlough plan is a wise decision if the employer can show that they can no longer pay the workers. It is not a 100 percent fireproof solution. But  it should do. More time should be spent on fighting and winning the COVID-19 war, keeping  workers (and other people) safe, and returning life to normal so that businesses can safely  recall furloughed workers.  

Written By: David A. Asiedu  

The writer is a Partner-in-Charge of Commercial Dispute Resolution  at ENSafrica Ghana.