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During the global pandemic, ‘furlough’, a generic term used to describe a temporary lay-off and/or short-time working scheme, subsidized by public means in order to enable job retention, became a widely used phenomenon. But where did this concept come from? And, what legal status do such schemes have? Whilst the world hurried to manage the potential economic and social impact of the coronavirus pandemic, were existing legal rights and obligations overlooked? To that end, this paper will compare the variant job retention schemes used for the furloughing of workers. Arguably, such temporary lay-offs/short-time working, ‘furlough’ schemes have both social and economic impact at local, regional and national levels. Within such a contemporary debate, this paper will therefore comparatively evaluate the ‘furlough’ concept and navigate through the variant furlough impact typology. Overall, the paper will review how furlough schemes enabled a supervening employment policy intervention to either reshape the existing labour law measures or to emphasize existing rights and/or entitlements with no juridical effect. Regardless of its impact and legal status, ‘furlough’ has been heralded as labour law’s response to the global pandemic.

Although reduced working time and furlough policy initiatives are widely regarded as important for economic and business reasons, little is known about their impacts on workers’ mental health at the onset of COVID-19 pandemic. Using data from the UK Household Longitudinal Panel Study data from 2018 to February 2020 and April 2020 and change score analysis, this study aims to compare mental health changes between those who worked reduced hours, were furloughed and left/lost paid work. The results suggest that at the onset of COVID-19 reduced working time and furlough can protect workers’ mental health, but only for men not for women. The gender differences remain significant even after controlling for housework and childcare responsibilities at the onset of COVID-19. These results highlight the importance of distributing paid work more equitably and formulating gender-sensitive labour market policies in protection of workers’ mental health.

Existing literature on how employment loss affects depression has struggled to address potential endogeneity bias caused by reverse causality. The COVID-19 pandemic offers a unique natural experiment because the source of unemployment is very likely to be exogenous to the individual. This study assessed the effect of job loss and job furlough on the mental health of individuals in South Africa during the COVID-19 pandemic. The data for the study came from the first and second waves of the national survey, the National Income Dynamics-Coronavirus Rapid Mobile Survey (NIDS-CRAM), conducted during May-June and July-August 2020, respectively. The sample for NIDS-CRAM was drawn from an earlier national survey, conducted in 2017, which had collected data on mental health. Questions on depressive symptoms during the lockdown were asked in Wave 2 of NIDS-CRAM, using a 2-question version of the Patient Health Questionnaire (PHQ-2). The PHQ-2 responses (0-6 on the discrete scale) were regrouped into four categories making the ordered logit regression model the most suited for assessing the impact of employment status on depressive symptoms. The study revealed that adults who retained paid employment during the COVID-19 lockdown had significantly lower depression scores than adults who lost employment. The benefits of employment also accumulated over time, underscoring the effect of unemployment duration on mental health. The analysis revealed no mental health benefits to being furloughed (on unpaid leave), but paid leave had a strong and significant positive effect on the mental health of adults. The economic fallout of the COVID-19 pandemic resulted in unprecedented job losses, which impaired mental wellbeing significantly. Health policy responses to the crisis therefore need to focus on both physical and mental health interventions.