On Friday the government announced measures to try and safeguard UK jobs. We have been inundated with questions and are doing our best to provide the best advice to you, but sadly we do not know the answers to everything yet.
We are waiting for the full details of the scheme to be released, and as soon as they are, we will be able to give more specific advice.
For the time being, we have been able to answer a number of key questions which are outlined below.
What is Furlough Leave?
Furlough is an American word used as we might use “leave”, or “sabbatical”.
To be classed as on Furlough, the employee must be sent home without work, it is not available to employers where the employee continues to work or simply works from home instead of their normal place of work.
How Does the Scheme Work?
Employers can place employees on leave, requiring employees to perform no work and, presumably, requiring employees not to attend the place of work. The Government will reimburse 80% of the wage cost of Furloughed workers up to a cap of £2,500 per employee, per month. Employers can, but are not obliged to, make up the 20% difference.
When Does the Scheme Take Effect?
The scheme has retrospective effect from 1 March 2020 and is expected to apply for three months initially, so until the end of May 2020.
Do you need Employees’ Consent to put them on Furlough leave?
If you have a clause in the contract which allows you to either introduce lay off, or short time working, then no consent is required.
If you have no lay off clause in the contract, technically consent will be needed. This is because placing an employee on Furlough will be a variation of their current employment contract and imposing a pay reduction. However, if an employee refuses to consent to be sent home on Furlough, then they risk being made redundant. An employee could be made redundant if they refuse, provided a fair process is followed.
Can an Employee Insist on going onto Furlough Leave?
No. It is the employer’s decision and the employer can choose whether or not to implement furlough leave and, if implemented, which employees it will apply to.
What is the Process for Obtaining Payments?
The government are setting up a portal. It is not up and running yet but we suggest the following as a general process:
- Select your employee for Furlough
- Gain written consent to 80% pay
- Send the employee home without work
- Register for the Furlough Pay using the online registration portal (when up and running).
We Made Employees Redundant in March 2020. Can We Now Reinstate Them and Put Them On Furlough Leave?
Yes, there is no reason why employers cannot do this. However, it is recommended that you only do this if the Furlough would save the post from being made redundant. If you know that the work has diminished and won’t come back, then the redundancy decision may still stand.
If you decide to revoke the redundancy notice and invoke Furlough then if payment of notice and statutory redundancy pay was made, you would need to ask for this to be reimbursed before entering into the furlough leave arrangement.