Coronavirus furlough leave/job retention scheme

Furlough leave is basically being laid off work temporarily. It is used in the government initiative to enable employers whose business have been severely affected by the coronavirus pandemic to retain their employees.  It’s officially called the Coronavirus Job Retention Scheme and this article briefly addresses some of the isssues facing the millions of employees who have been and/or still are on the scheme.

Furlough scheme pay

The scheme has been running since March 2020 for employees who were on the payroll before 19th March 2020. Under the scheme, the government initially paid 80% of an employee’s salary up to a maximum of £2,500 per month. 

It continued at the above payment levels until the end of August 2020, and then payments started to reduce (to 70% for September and 60% for October 2020).

It concludes with a £1,000 ‘bonus’ payment for employers who take their employees back off of furlough leave and keep them employed until the end of January 2021.  (See also sections below on how long the furlough scheme lasts, and employers’ NI and pension contributions.)

The payment is made to the employer, and it is for the employer to agree with the employee any reduction in salary.

Who is eligible for furlough scheme pay?

The furlough scheme covers any employee at all, and not just employees who would otherwise be made redundant for lack of work.

This means that it could be used where the employee was self-isolating due to a fear of contracting or spreading coronavirus. It could also be used for employees who couldn’t work because of childcare responsibilities arising from the schools and nurseries shutting. (The right to time off for dependents is provided by s.57A of the Employment Rights Act 1996, here.)

The deadline date for employers to register employees as new entrants to the furlough scheme passed on 10th June 2020,  although it was extended for employees on statutory maternity/paternity leave and Armed Forces reservists (see below). 

 

 

 

How long does the furlough leave scheme last?

1st March 2020 to 31st August 2020: the government contributed 80% of a furloughed employee’s salary up to the monthly cap already mentioned. The scheme is now closed to new entrants.

For September 2020 the government contribution reduces from 80% to 70%, with a monthly cap of £2,190.  The employer contributes the additional 10% (plus top up to 100% if that is what has been agreed with you).

For October 2020 the government contribution tapers down to 60%, with a maximum of £1,875 per month.  The employer’s contribution will now be an additional 20% (plus any agreed top up as above). At the end of October, the furlough scheme is set to end in it’s present form.

A £1,000 furlough scheme bonus payment is subsequently being offered by the government to help ease the transition from the scheme and back to ‘normal’.  It will be paid to employers for each employee they take back off of the furlough scheme and keep employed until the end of January 2021.

 

What can I do if my employer refused to furlough me because I was worried  about covid-19 health and safety issues at work?

Some employers refused to place their employees on the scheme because they were self-isolating and feared that the workplace was unsafe to attend due to coronavirus.  If that’s you, and you suffered a pay cut, got no pay or were even dismissed as a result, then you may have a claim against your employer for breach of contract. unfair dismissal,  constructive dismissal or other unfair conduct. 

Also see our article on unfair dismissal, pay cuts and bullying resulting from coronavirus safety issues at work

Remember that there are strict time deadlines of three months within which you need to submit any claim you may have against your employer. (See our article on time limits for making tribunal claims for further information.)

 

Did I have to agree to be furloughed?

Your employer was legally obliged to have sought your agreement in advance of putting you on the scheme.  They couldn’t just tell you that you were being furloughed or force you to accept it.  If you didn’t agree, then your employer could have made you redundant (see below).

Similarly, if you didn’t agree to being paid anything less than 100% of your wage or salary, your employer could either have paid you 100%, or else again, they could have made you redundant.

 

Under the furlough scheme, do I receive my full salary/wage or just a percentage of it?

The government currently (September 2020) pays the employer 70% of your wage (capped at just under £2,190 for the month, for the hours you are on furlough).  But your employer is still obliged to top up the 70% and to pay you 100% of your wage, unless they get your agreement to pay only 70%. You can choose not to accept the 70% and insist on 100%. 

If your employer says they can’t afford to pay you 100%, and you don’t agree to wait until they can, they need to make you redundant, and then pay you a redundancy package. If you have no contractual redundancy package in your contract of employment, then you will be entitled to statutory redundancy pay (maximum of £16,140 or £538 per week x 30 weeks  – rates apply from April 2020).

 

What if the % government pay takes me below the national minimum wage?

Your employer does not have to top you up to national minimum wage because you are not actually working.

How does it work if I have an irregular wage?

If your pay varies, your employer can claim for the higher of (i) the same month’s earning from the previous year (eg earnings from March 2019); or (ii) average monthly earnings in the 2019-20 tax year.

If I had to stay at home due to childcare could I be furloughed?

Yes, so long as you were registered before 10th June 2020 –  and except for parents on statutory maternity/paternity leave who were given more time to be registered as new entrants – see below.

What if I was on statutory parental leave when the furlough scheme closed?

An extension for new entrants to the scheme beyond the cut-off date of 10th June was granted for employees on statutory parental leave on that date.

To be eligible, your employer should have had at least one other person already on furlough leave between 1st March and 30th June 2020.  The employee concerned must also have been on the PAYE payroll on or before 19th March 2020 and must have started parental leave before 10th June and returned after 10th June.

If I was self-isolating or on sick pay, could I have been furloughed?

The official guidance on this states: “You cannot claim for employees while they’re getting Statutory Sick Pay, but they can be furloughed and claimed for once they are no longer receiving Statutory Sick Pay.” So once you stopped receiving SSP, you could have been furloughed (prior to the 10th June cut-off date for new entrants already mentioned).

 

I was and still am shielding, could I have been furloughed?

Shielding is ‘a measure to protect people who are clinically extremely vulnerable by minimising all interactions between them and others’  (see Gov.uk Guidance on shielding).  And yes,  you could have been placed on furlough when shielding.  Unfortunately the government guidance on shielding was initially not very clear, and therefore some employers got this wrong.

Could old / pregnant / vulnerable employees have been placed on furlough leave, even though the company was not laying anyone else off?

Yes.

Do the government percentage payments cover commission and bonuses?

Sadly the scheme does not cover fees, bonuses and commission.  See also the next question about NI and pension payments.

Does the government pay employers’ national insurance and pension contributions?

Employers did not have to pay the employers’ NI and pension contributions for employees on the Job Retention Scheme from March until the end of July 2020, but from 1st August 2020 employers have been required to make those payments.

Can I do any paid work when on the furlough scheme?

Up to 30th June 2020, you could not be doing any work whatsoever for your employer. There was nothing to stop you from doing paid work for other people though. 

From 1st July 2020, ‘flexible furlough’ was introduced.  Under this development, you can do part-time work for your employer, for which they should pay you 100% pro-rata of your wage/salary.  The furlough money they get for you from government is reduced accordingly.

What was my employer supposed to do before they could access this money?

Your employer should have got your agreement if they couldn’t or didn’t want to pay you until they could access the furlough money. You could have insisted on payment as usual during this time. If you did insist, and they didn’t pay, then they would be in breach of contract and you could claim against them in the employment tribunal. 

Could my employer choose anyone to put on furlough leave?

Your employer had discretion on who to furlough – they could use any rational system to choose. For example it could be length of service. But the Equality Act 2010 still applies, so it couldn’t be done in a discriminatory way. They could have prioritised old and vulnerable people, even though this might be seen as discrimination against young people, because age discrimination can be ‘justified’ in some cases.

Can my employer rotate people on furlough leave?

Yes, so long as each employee is off for a period of at least three weeks. Furlough leave must be taken in minimum blocks of three weeks to be eligible for funding.

Can my employer require me to take holiday when on furlough leave?

Yes, so long as they give you twice as much notice as the length of holiday. For example if they want you to take 1 week off, they need to give you 2 weeks’ notice.

 

Does my holiday continue to accrue during the time I’m furloughed?

Yes 

What if I no longer want to be on the furlough scheme, but to take redundancy instead?

Our best guess is that if you are on the furlough wage for 4 weeks in a row you will be entitled to ask your employer to make you redundant instead of continuing on the scheme.

Can I be made redundant now that the government scheme is closed to new entrants?

Yes you can, providing your employer follows proper procedures for redundancy. See our redundancy guide and also our redundancy letter builder that you can use to create a letter to your employer if you are facing redundancy or have recently been made redundant.  

Does the government scheme apply if I’m on a zero hours contract?

The scheme applies to people on PAYE, and this should cover some people on zero hours contracts, but may not cover all.

If you were not on PAYE, then you would not have been eligible. So would your employer have been obliged to pay your full wage for you to be at home and not work?  The answer unfortunately is no. It is likely that your employer could have opted to pay you SSP (statutory sick pay) but some employers have chosen not to do this.   

If my days or hours were reduced, could I still have accessed the furlough scheme?

No. Prior to 1st July 202o when the rules about doing part-time work changed,  this scheme was only avaialable to you if your whole job had stopped. If – prior to July – you did even one hour of work the whole time you were on furlough leave, that means the scheme was void for you.      

Could I ask for a pay rise to top up the furlough pay, so I still get the same money as before?

No.

Could I be disciplined or carry on my grievance whilst on furlough leave?

Yes. 

Other job retention initiatives 

Whilst it is gradually winding down the furlough scheme for employees in the form outlined above, the government is making further help available to support employment in the hospitality and tourism sectors which the pandamic has hit particularly hard.  To this end, the Chancellor announced two new initiatives:

A reduction in VAT from 20% to 5% for food, accommodation and attractions with effect from 8th July 2020 until 12th January 2021.

‘Eat out to Help Out’: In this short term initiative, participating businesses offered customers 50% off of their meals (food only), up to £10 per head – including children.  This deal was available to customers on Mondays, Tuesdays and Wednesdays throughout August 2020. The businesses involved could then claim the discount back from the government.

Your next steps

If you are having problems at work with such issues as absence, pay, dismissal or other matters arising from the covid-19 pandemic, Monaco Solicitors may be able to help you.

Our other coronavirus-related guides are listed below and will give you a better understanding of your employment rights and practical guidance.

Our free coronavirus employment rights app  is really easy to use and creates written advice for you, together with examples of legal letters addressed to your employer.

You may also find our redundancy letter builder useful. With this, you answer questions about your redundancy situation (present or recent past) and it creates a letter to your employer reminding your employer of your rights and suggesting a way forward.

If you need a lawyer to take your case, including on a no win no fee basis, please request a free consultation.

 

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