Since the start of COVID-19 crisis, many companies have been choosing from a menu of options to control labour costs, including layoff, furlough, or temporary work hours or wages, based on the business’ current or future needs. Layoffs are a means of permanently eliminating positions, while furloughs could be a better option if employers lack resources to pay its employees but still want them to join the workforce after the crisis ends.
Furlough planning is created to help both businesses and employees survive during the coronavirus crisis. In Singapore, the government has provided flexibility in ComCare’s eligibility criteria and additional schemes, including a Temporary Relief Fund and COVID-19 Support Grant. In Hong Kong, the government has announced a new HKD 80 million subsidy package to prevent mass unemployment, with eligible employers will receive funding to pay 50 percent of their employees’ wage, capped at HK 9,000 per month for a period of six months.
However, the COVID-19 job retention scheme, furlough scheme, is unprecedented and is unlikely to be created for in typical employment contracts. The scheme is commonly created only under (temporary) employment act and is not being cited in the industry contract. Stuart Gentle concerned that the eventual return to work activities are unlikely to be fully covered by existing clauses. Therefore, there might be friction when it comes to the end of furloughing, such as redundancy and non-compliance with employment law. Yet, with many businesses calling their employees to return to work now, HR should reconsider their employment contract once again, in order to avoid misconduct of returning employees from furlough. Employers and HR should also be mindful in selecting the criteria of furloughed employees, who will return to work first then others to avoid discriminations claims.
The following are considerations for HR and business leaders to return employees who were in furlough.