The Government introduced a Coronavirus Job Retention Scheme in 2020, which is a temporary scheme open to all UK employers that have been placed on furlough as an alternative to making them redundant. The scheme has been extended and is currently due to run until 30 April 2021.
Employers can claim for 80% of the usual monthly wage costs up to a maximum of £2,500 per month. The employee is placed on leave and may not work for the employer unless they are on flexible furlough. Flexible furlough, which was introduced in July 2020, allows employers to require employees to work part time. The employer must pay the employee in full for any hours worked but can claim 80% of their wage for hours not worked from the government (subject to the monthly cap.
What does ‘Furlough’ mean?
The definition of the word furlough is to ‘take a leave of absence’ from service. Essentially, implementing furlough allows employees to be temporarily absent from work, and not carry out any work that makes the firm revenue, but still be paid by the employer.
Who can claim on the ‘Coronavirus Job Retention Scheme’?
Any UK organisation with employees can apply, including:
- recruitment agencies (agency workers paid through PAYE)
- public authorities
If you work for a public sector organisation, the Government expects that the scheme will not be used by many areas, as many public sector employees are continuing to provide essential public services or contribute to the response to the coronavirus outbreak. However, where employers receive public funding for staff costs, and that funding is continuing, employers will be expected to use that money to continue to pay staff and not place them on furlough.
Organisations who are receiving public funding specifically to provide services necessary to respond to COVID-19 are not expected to furlough staff.
Which employees can an employer claim for on the ‘Coronavirus Job Retention Scheme’?
Furloughed employees must have been on your PAYE payroll between 20 March and 30 October 2020, and can be on any type of contract, including:
- full-time employees
- part-time employees
- employees on agency contracts
- employees on flexible or zero-hour contracts
The scheme also enables an employee to rehire an employer in order to furlough them if they were employed as of 23 September 2020 and on the payroll on or before 30 October 2020.
Can an employer force an employee to go on Furlough?
It is unlikely that the firm will have a contractual right to place staff on furlough so consent from the employee must obtained. Failure to do so may constitute a breach of contract.
Employers should discuss with their staff and make any changes to the employment contract by agreement. When employers are making decisions in relation to the process, including deciding who to offer furlough to, equality and discrimination laws will apply in the usual way.
To be eligible for the subsidy employers should write to their employee confirming that they have been furloughed and keep a record of this communication.
If an employee has more than one job you can be furloughed for each job.
Does an employee on Furlough maintain their employment rights?
Employees that have been furloughed have the same rights as they did previously. That includes Statutory Sick Pay entitlement, maternity rights, and other parental rights, rights against unfair dismissal and to redundancy payments.
Can you be made redundant rather than placed on ”Furlough”?
An employer can choose to implement redundancies rather than furlough employees. An employer cannot force an employee onto furlough. But in testing whether or not a redundancy dismissal was fair, an Employment Tribunal would look at whether there was a “suitable alternative”. An employer would therefore have to be able to explain why government-funded furlough was not a suitable alternative to dismissal.
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