Coronavirus furlough leave/job retention scheme

Overview of the furlough scheme as at December 2020

Furlough leave is basically being laid off work temporarily. It has been used by the government to enable employers whose business have been severely affected by the coronavirus pandemic to retain their employees.  The furlough scheme is officially called the Coronavirus Job Retention Scheme.  

The furlough scheme was due to end on 1 November 2020 and to be replaced by the Job Support Scheme, but the JSS has been postponed and the furlough scheme extended until 30 April 2021.

This short guide to the furlough scheme very briefly outlines its main features and was updated in December 2020.

Furlough scheme pay

  • Under the latest variant of the scheme (December 2020), the government is once again paying 80% of an employee’s salary up to a maximum of £2,500 per month.

 

  • The government will review the policy in early 2021 to decide whether economic circumstances are improving enough to ask employers to contribute more.

 

  • In the extended furlough scheme, you have to have been on your employer’s payroll on or before 30th October 2020. You also must have had a Pay As You Earn (PAYERTI submission made between 20 March 2020 and 30 October 2020, notifying a payment of earnings for you.

 

  • With the extension of the furlough scheme, the previous £1,000 ‘bonus’ payment for employers who took their employees back off of furlough leave from November (when the scheme was previously supposed to have ended), has been withdrawn.  

Eligibility 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 can be used where the employee is self-isolating or shielding due to a fear of contracting or spreading coronavirus.

 

 

 

Roadmap of the furlough scheme

The scheme began in March 2020 and has now been extended to 31st March 2021.  It has been through the following major variations:

1st March 2020 to 31st August 2020: The government contributed 80% of a furloughed employee’s salary up to a monthly cap of £2,500. 

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

October 2020: The government contribution tapered down to 60%, with a maximum of £1,875 per month.  The employer’s contribution was now an additional 20% (plus any agreed top up as above). At the end of October 2020, the furlough scheme was due to end in its original form.

1 November 2020: The furlough scheme was extended until the end of April 2021 and is once again contributing 80% to a furloughed employee’s salary, with a £2,500 monthly cap.

Early 2021, The government plans to review their contribution in the light of economic circumstances prevailing at that time.

The £1,000 furlough scheme bonus payment which was to have been paid to employers for taking employers off of the furlough scheme from November 2020 has been withdrawn.

 

FAQs about the furlough scheme

What can I do if my employer refuses to furloughed me because I’m worried about covid-19 health and safety issues at work?

Some employers have been known to refuse putting their employees on the scheme if they are/were self-isolating because of fears that the workplace was unsafe to attend due to coronavirus.  If that is or was you, and you have suffered a pay cut, got no pay or even been 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.)

Do I have to agree to be furloughed?

Your employer has always been legally obliged to seek your agreement in advance of putting you on the furlough scheme.  They can’t just tell you that you are being furloughed or force you to accept it.  However, if you refuse(d) to agree, then your employer can make you redundant (see below).

Similarly, if you won’t agree to being paid anything less than 100% of your wage or salary, your employer can either top up your pay to 100%, or else again, they can make you redundant.

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

During the current extension of the scheme (December 2020), the government pays your employer 80% of your wage (capped at £2,500 per month for the hours you were on furlough). 

But your employer is still legally obliged to top up the 80% and to pay you 100% of your wage unless they have your agreement to pay only 80%. You have the right not to accept the 80% and to 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 afford to pay you in full, then they can make you redundant, and pay you a redundancy package.

If you have no contractual redundancy package in your contract of employment, then you are 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 if you are not actually working.

How does the scheme 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 am self-isolating or on sick pay, can I be furloughed?

The official guidance on this is that an employer “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 stop receiving SSP, you can be furloughed (providing you meet the payroll and PAYE conditions outlined at the beginning of this article).

I am shielding, can I be furloughed?

Shielding is ‘a measure to protect people who are clinically extremely vulnerable by minimising all interactions between them and others’. The government has issued new shielding measures, effective from 5 November 2020, to people who are shielding.   And yes,  you can be placed on furlough when shielding.  

Can old/pregnant/vulnerable employees be placed on furlough leave, even though no-one else is being laid 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?

As from 1st November 2020, employers will pay employer National Insurance Contributions (NICs) and pension contributions for the hours the employee does not work.

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 alongside full-time furlough, and this continues for the extended scheme.

Under the flexible furlough arrangement, you can do part-time work for your employer, and they should pay you 100% pro-rata of your wage/salary for that part-time work.

The furlough money your employer receives for you from the government will only be for the hours that you don’t work when compared with the hours you would normally have worked during that time.

If you are fully furloughed, you can’t do any work for your employer during the time you’re recorded as being on furlough.

Can my employer choose who to furlough?

Since the inception of the scheme, your employer has had the discretion on who to furlough – they can use any rational system to make their selection. For example, it could be length of service.

But the Equality Act 2010 still applies, so selection can’t be done in a discriminatory way. Your employer could prioritise 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, they can, but there is now no minimum number of weeks or days that you must be on furlough. (It was previously 3 weeks.) Having said that, employers making claims through the government portal usually have to cover periods of at least 7 days (excluding the first or last few days in a month).

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 the 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 am furloughed?

Yes, as you are still employed and you have a right to the statutory minimum of 5.6 weeks per year)

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

You can apply for redundancy pay if you have worked for your employer for 2 years or more. The 2 year qualification period includes time you were furloughed. (See gov.uk article on furlough and redundancy for more.)

Could I be made redundant after I’ve been furloughed?

Yes you could, providing your employer followed proper procedures for redundancy – see our redundancy guide for more about this.  Also try our redundancy letter builder that you can use to create a letter to your employer if you were/are facing redundancy or have recently been made redundant.  

Also note that there is now legislation in place which requires your employer to calculate your redundancy pay based on your pre-furlough wages or salary, rather than on your reduced furlough pay.

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

The scheme applies only to people on their employer’s payroll and on PAYE on or before 30 October 2020, and  should cover some – but not necessarily all – people on zero hours contracts. 

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

You can ask, but your employer is under absolutely no obligation to give you such a pay rise.

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

Yes. 

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 can help.

  • 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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