Employment Law: Coronavirus Job retention Scheme | April 2020
These are very difficult and unprecedented times for everyone, both personally and for businesses.
It is also proving a busy time for HR too: helping leaders to keep up to date with what government support is available and supporting employees.
Many leaders are unfortunately needing to furlough employees – the most used phrase amongst HR teams at present.
As you may be aware, the Coronavirus job retention scheme was announced on 20th March 2020 to provide security for many businesses and employees during this crisis. This is providing a mechanism to retain employees whilst there is little or no work available. This will thankfully help to minimise the need for redundancies.
What is a Furloughed employee?
The employee is placed on ‘leave of absence’ as an alternative to redundancy; where the employer has been adversely affected by the crisis.
The employee stays on the payroll and the employer can apply for a grant to recover a proportion of their pay (up to 80% of their salary, with a cap of £2500 per month). The employee also needs to be on the payroll as at 28th February 2020.
Employer National Insurance payments and minimum auto-enrolment employer pension contributions can also be recovered.
What should the Employer do to furlough an employee?
Employers will need to advise employees that it is planned that they will be ‘furloughed’ and the employer needs to seek their agreement. This is because contracts of employment do not give an employer a unilateral right to withdraw work or lay off employees and in many cases pay will be reduced.
It will be important to keep written evidence of the communication with the employee and their agreement to the arrangement to furlough. You may need to advise them of the alternatives e.g. redundancy, when seeking their agreement.
Note that where a redundancy takes place, this will potentially trigger collective consultation duties. The employer may be able to argue that there is a ‘special circumstances’ case to implement a reduction in any collective redundancy consultation time-frames, however consultation cannot be avoided altogether.
How long can an employee be furloughed for?
Current guidance states that the scheme will be in place for three months from 1st March 2020. The minimum period of furlough leave is three weeks.
Who is eligible?
All PAYE employees are eligible, including those on zero hours contracts.
It is important to bear in mind that employers must not discriminate when deciding which employees to place on leave. However, it is not expected to be discriminatory to offer it to employees considered as ‘vulnerable’ as per government guidance.
Offering ‘furlough leave’ to vulnerable individuals in line with the guidance is likely to be acceptable ‘means of achieving a legitimate aim’.
Can employees continue to work while furloughed?
Employees should not carry out any work for their employer during this time. They can however carry out any training provided. They may also undertake voluntary work that does not generate revenue for their employer.
What happens after the scheme comes to an end?
It is unclear at present, but the government may choose to extend the scheme.
When the scheme does reach its conclusion, the employer will need to decide whether the employee can return to their duties. Please note: the employer has no obligation to retain the services of furloughed employees for a period of time after the scheme ends. If your employee is not returned to their full contracted hours and pay, contractual or statutory notice periods and redundancy rights will apply in the usual way.
The government information is being constantly updated therefore if you require additional and more detailed advice, cHRysos HR are able to provide professional HR support to your business. Click here to get in touch.
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