Asking theatre workers to repay furlough money is not illegal – theatre lawyer

A leading theatre lawyer has said it is unlikely that contracts requiring offstage workers to repay furlough contributions are against the law.

However, she warned that questions may be raised around whether employees were given a legitimate choice in the matter.

Yvonne Gallagher, who is a partner at entertainment law firm Harbottle and Lewis, said questions could be raised if employees are asked to repay national insurance contributions made when the furlough scheme changes in August.

The Stage reported earlier this week that offstage workers had been asked to sign contracts requiring them to repay employer furlough contributions from their wages.

Furloughed workers currently receive 80% of their wages, up to £2,500, through the government’s Coronavirus Job Retention Scheme.

The scheme is being phased out from August, with employers initially being required to pay national insurance and pension contributions. From September they will be asked to contribute 10% of wages for furloughed employees, rising to 20% from October.

Gallagher told The Stage: "The furlough rules, quite understandably, are not drawn up as legislation, they’re drawn up as guidance, without the level of detail that goes with legislation.

"There’s been a lot of filling in the gaps as things go on, and things that looked clear on March 23 [when the scheme was first announced] changed in the next month or two as people started to question the details."

Gallagher said legal questions may arise if workers are asked to pay back the employer national insurance contributions from their wages.

"The arguments will be around passing on national insurance costs," she said.

"Once we get to September and October, when the employer is required to bear part of the furlough payment, it’s very difficult to see any argument where it’s not lawful. The argument will be around whether a genuine agreement was reached."

She added: "If your choice is: ‘If you don’t agree to this, there won’t be a job for you’ - some people may say they were coerced into that agreement."

According to Gallagher, the situation is a result of the same furlough rules being applied to all industries, when some – including theatre – are yet to fully reopen.

"From the employer side, it is a cold, hard reality [that they] can’t afford to fund wages because they don’t have any income, and it’s about finding a balance that keeps the individual being paid, hoping they will remain employed come a better day. It’s a real balancing act," Gallagher added.