We’ve had a large number of questions regarding the government’s job retention scheme. Our Which? Legal team has answered some of the most common.
In March the government announced a scheme to ‘help employers whose operations have been severely affected by coronavirus to retain their employees and protect the UK economy‘.
Employers can ‘furlough’ their staff and apply for a grant from the government to cover 80% of each person’s usual monthly wage, up to a max of £2,500 a month.
The Scheme will close to new entrants from 30 June 2020 and is due to come to an end altogether in October 2020.
On 29 May, the Chancellor announced that:
A) From 1 July 2020 furloughed employees will be able to return to work on a part-time basis. Employees will be entitled to be paid in full for days worked. The employer can claim under the scheme for days not worked (subject to the relevant salary cap).
B) From 1 August 2020, employers will be required to pay the following contributions towards furloughed employees’ furlough pay:
August: the employer national insurance contributions and employer pension contributions on the furlough pay.
September: 10% of employees’ 80% furlough pay. Recoverable furlough pay will be capped at £2,187.50.
October: 20% of employees’ 80% furlough pay. Recoverable furlough pay will be capped at £1,875.
As furloughed employees can return to work on a part-time basis from 1 August, the new caps will be proportional to the hours not worked.
The Scheme applies to anyone who is furloughed “by reason of circumstances as a result of coronavirus or coronavirus disease”. An employer cannot apply for a grant if to do so would be “abusive or is otherwise contrary to the exceptional purpose” of the Scheme.
Guidance on the scheme is continually being updated, but the team here at Which? Legal has done its best to answer some of the most common questions we’ve seen so far.
Who’s eligible for the furlough scheme?
Any employer within the UK will be able to claim, but they can only furlough staff that were on their PAYE payroll on or before 19 March 2020. This includes staff on ‘zero-hours’, fixed-term or temporary contracts.
Anyone who “stopped working” on or after 28 February 2020 but before 19 March can be furloughed if they are re-engaged by their former employer. However, there is no obligation on their employer to do so.
People hired after 19 March 2020 cannot be furloughed.
Both the employer and the individual must agree to them being furloughed in writing (e.g. an email).
The scheme does not apply to the self-employed – they may qualify for support under the Self-employment Income Support Scheme.
Can you ask to be furloughed?
Yes, but – ultimately – it is the employer’s decision as to which staff it furloughs.
Can you still undertake work whilst you are furloughed?
You cannot do any work for any employer that has furloughed you, but you can undertake training.
You can work for another employer (providing your contract of employment does not prevent you from doing so, or your employer consents). However, you cannot work for any business that is associated with or linked to your employer.
You can do volunteer work, providing it is not for your employer.
Can you be furloughed more than once?
Yes, multiple times, providing each furlough period lasts at least three weeks.
If you have jobs with different employers, you can be furloughed from one or both jobs.
Can you be furloughed if you’re off sick?
If you have not already been furloughed but you are off work and you are receiving SSP, you cannot be furloughed until that period of absence has ended.
Only then can you be furloughed. The Guidance suggests that if someone becomes sick whilst on furlough it is up to their employer as to whether they keep them furloughed, or put them onto sick leave.
Can your employer still make you redundant?
Yes it can – either whilst you are furloughed or afterwards. Being furloughed does not affect your normal redundancy rights.
What are the alternatives to furlough leave?
Your employer could ask you to take a temporary (or permanent) pay cut and/or reduce your working hours.
Your employer could also ask you to stop working for a while (a ‘temporary lay-off’), or work fewer hours (‘short-time working’). However, they would need either your agreement or a contractual right to do so.
The above information is provided by Which? Legal. Have you been placed on furlough leave? Do you feel you were given all the information you needed around the scheme?