Two recent non-tax cases highlight some of the issues the CJRS
is creating in many real-world situations.
In Debenhams
[2020] EWHC 921 (Ch), the employment contracts of furloughed employees were
taken to have been adopted by the administrators, making the company liable for
the shortfall between the sums reimbursed under the scheme and the salary
payments due under the employment contract. In this unfortunate situation, the
scheme which was clearly designed to preserve both businesses and jobs led to a
shortfall of some £3m per month, potentially undermining efforts to rescue the
business.
In Carluccio’s
[2020] EWHC 886 (Ch), furlough was available to the administrators as an
alternative to redundancy, where there was a reasonable likelihood of the
employees returning to work for the company or another employer who went on to
acquire the business following a sale by the administrators.
Two recent non-tax cases highlight some of the issues the CJRS
is creating in many real-world situations.
In Debenhams
[2020] EWHC 921 (Ch), the employment contracts of furloughed employees were
taken to have been adopted by the administrators, making the company liable for
the shortfall between the sums reimbursed under the scheme and the salary
payments due under the employment contract. In this unfortunate situation, the
scheme which was clearly designed to preserve both businesses and jobs led to a
shortfall of some £3m per month, potentially undermining efforts to rescue the
business.
In Carluccio’s
[2020] EWHC 886 (Ch), furlough was available to the administrators as an
alternative to redundancy, where there was a reasonable likelihood of the
employees returning to work for the company or another employer who went on to
acquire the business following a sale by the administrators.
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