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Furlough leave: common questions answered

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’ certain 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 some important changes to the scheme:

From 1 July 2020:

i) the number of employees an employer can claim for in any one month may not exceed the number in any previous claim, i.e. no new people can be added,

ii) employers will be able to furlough people for less than the current minimum of three weeks.

iii) furloughed employees will be able to return to work on a part-time basis for any amount of time and any shift pattern. Employees will be entitled to be paid in full for any days worked, whilst the employer can submit a claim under the Scheme for days not worked (subject to the relevant salary caps).

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 July, the new caps will be proportional to the hours not worked.

On 12 June the government published further guidance on how the Scheme will operate between July and the end of October.

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.

Read all the latest COVID-19 news and advice on our dedicated hub

Who’s eligible for the furlough scheme?

From 1 July 2020 employers can only claim from the Scheme in respect of employees who were furloughed on or before 10 June 2020, with the exception of those who are returning to work following a long period of statutory family leave, e.g. maternity or shared parental leave.

Prior to that, any employer within the UK was eligible to claim, but they could only furlough staff that were on their PAYE payroll on or before 19 March 2020. This included 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 were re-engaged by their former employer. However, there was no obligation on their employer to do so.

People hired after 19 March 2020 have never been eligible to be furloughed.

The scheme does not apply to the self-employed – they may qualify for support under the Self-employment Income Support Scheme.

Can you still undertake work whilst you are furloughed?

Currently 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. 

From 1 July you can return to work for your employer on a part-time basis (see above). If your employer wants you to begin working part-time they will need to send you a new furlough agreement to sign outlining the circumstances in which they may require you to attend work.

You can do volunteer work whilst on furlough, providing it is not for your employer. 

Can you forced to take holiday whilst on furlough?

Any employer considering asking someone to take annual leave should check that they have the right to do so under the contract of employment.

If the contract doesn’t mention anything on this point, your employer may still be able to require you to take leave; by giving you prior notice equivalent to at least twice the length of time they want you to take off. For example: if they want you to take one week’s holiday they would need to give you at least two weeks’ prior notice.

Depending on the circumstances, there may be arguments to resist being placed on compulsory leave. This can be complicated; if you’d like more in-depth, affordable advice from a legal adviser on this point, you can call and join Which? Legal.

What pay should you receive if you take holiday whilst on furlough?

Perhaps surprisingly, this is a complex and, as yet untested, legal grey area. However, the general consensus appears to be that you should receive your normal pay for any holiday taken whilst on furlough leave. This view is supported by the government’s guidance on holiday and pay whilst on furlough, and separate ACAS guidance. Therefore, there is an argument that your employer should make up any shortfall in your pay.

Can you be furloughed more than once?

Yes, multiple times. From the 1 July, the minimum furlough period of three weeks will be removed so employers will be able to allow people to gradually return to work, i.e. on a part-time/flexible basis.

If you have jobs with different employers, you can be furloughed from one or both jobs.

What is the procedure for employers to end furlough leave?

The government has not outlined a particular mechanism for employers to end furlough leave and bring people back into the workplace. Ideally, your furlough agreement would provide for the circumstances in which furlough ends and how much notice your employer should give you before requiring you to attend the workplace.

In the absence of anything in your furlough agreement about this, your employer should aim to give you reasonable notice. What is ‘reasonable’ will depend on your individual circumstances.

ACAS have prepared some guidance about returning to the workplace which encourages employers to speak to its staff about their plans to work, including any planned changes to the workplace to minimise risks, e.g. providing hand sanitiser, changing start times (to avoid rush hours), amending working hours/patterns to avoid too many people being in at the same time.

Concerns about returning to the workplace

If you have concerns about returning to the workplace you should raise them with your employer in the first instance.

If you are able to work from home, this may well resolve the issue. If not, your employer should consider the current public health advice and the specific circumstances and reason why you are concerned about attending work. For example, if you have school age children but schools remain fully closed, you may be entitled to take dependant’s leave, holiday or unpaid leave (with agreement of your employer).

You also have certain rights; including the right not to be dismissed or suffer any form of detriment for raising certain health and safety concerns. If you have such concerns you should take legal advice to understand your potential rights.

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?

Comments

Ive been furloughed since April and recently my employer has brought me back into the business part-time. They won’t bring me back full time as they think the work isn’t there but someone else in the business is covering my work – can they do this legally?

I have been employed at my workplace since Feb 2020 (prior to this I helped out a few hours in January and December and was paid). Whilst working out my furlough, they included the wages I earned whilst I wasn’t employed which was dramatically lower than my average contracted hours and in turn has brought my average furlough payment down. Can they do this?