Coronavirus/COVID-19 – have you been put on Furlough leave?
Most employees will have been affected in some way by the Coronavirus crisis. You may have been asked to work from home, work reduced hours, been made redundant or put on temporary leave (Furlough leave).
I will look at Furlough leave in this blog.
The Government has put in place the Coronavirus Job Retention Scheme. This scheme allows employers to obtain a grant of 80% of the wages of employees placed on Furlough leave, up to a total of £2,500 per month per employee. In addition, employers can claim the associated employer National Insurance contributions and minimum automatic enrolment employer pension contributions on those wages.
The scheme applies to employees but also to certain other individuals if they are paid via PAYE i.e. office holders (including company directors), salaried members of Limited Liability Partnerships, agency workers and certain other workers.
The scheme is in place for at least 3 months from 1 March 2020.
Your employer can make a claim for your wages under the scheme if you were on their payroll on or before 19 March 2020 and you were notified to HMRC on a RTI submission on or before that date. The minimum period of Furlough leave is 3 weeks.
You cannot work for your employer during Furlough leave. You can carry out volunteer work but this must not be for your employer or linked/associated organisation and nor must this make any money for your employer or any linked/ associated organisation.
There is not any Government guidance about how employers should select who should be furloughed; however, a failure to establish a fair selection process could give rise to claims for discrimination, amongst other claims.
With regard to whether your employer is required to top up the 80% of your wages, the Government scheme does not require this. However, most employment contracts will not permit employers to reduce employees’ pay and therefore normal employment law will apply.
Therefore, unless your employment contract provides otherwise, your employer should have sought written agreement from you to be placed on Furlough leave, including any intention to only pay 80% of your normal pay.
If your employer places you on Furlough leave and only pays you 80% of pay without prior written agreement, you could have employment claims, including a claim for the difference between your normal wages and your wages during Furlough leave.
There may also be collective consultation requirements (with trade union or employee representatives) where your employer seeks to change your and other employees’ terms and conditions of employment through termination and re-engagement, in certain circumstances.
Even if using Furlough leave is helpful to businesses over the next few months, there will, of course, still remain the possibility of further employment measures being implemented. The Government scheme has been designed to avoid staff being laid off or being made redundant but the scheme does not prohibit your employer from making redundancies.