Coronavirus job retention scheme: Every furlough question ANSWERED
The coronavirus job retention scheme was announced in March, along with a number of other financial relief packages. Under the scheme, employers can place an employee on furlough, and 80 percent of their salary up to £2,500 per month is covered by the Government. Although the scheme has largely been received positively, many questions have been raised about annual leave, sickness, employment rights and other rules regarding furlough.
What happens during the period of furlough leave?
Sarah Hayes at Paris Smith solicitors said: “The crucial point here is that the employee will not be able to undertake any work for their employer during the period in which they are on furlough.
“The aim of the scheme is to support workers who would otherwise be facing redundancy or unpaid layoff.
“This means that furloughed workers must stop working immediately. If an employer still wants an employee to perform certain aspects of their role or some of their duties, the scheme will not be suitable.”
What is the difference between a furloughed worker and a “laid off” worker?
Ms Hayes explained: “This is a good question and the terminology being used can be confusing.
“Many people assume that being “laid off” means that the employment has been terminated and the employee has lost their job permanently.
“However, under UK employment law the term “lay off” actually indicates a temporary period of not working.
“This is generally unpaid (subject to the right to guarantee payments) and the employee remains employed throughout the period of lay off.
“In reality, lay off and being a “furloughed worker” appear to be the same concepts.
“In both cases the employee will not be undertaking any work for the employer for a period of time, but their employment will be continuing.
“The crucial difference is that, under the new government scheme a furloughed worker will remain paid during this period. Laid off workers are usually not paid.”
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Does the employee have to consent to being a furloughed worker?
Sarah Hayes at Paris Smith solicitors said this depends on a number of factors including:
· The employment contract
· The kind of work the employee does and if pay depends in part on the employee being able to work (such as sales staff earning commission on sales or placements)
· If the employer is topping up to full pay
Ms Hayes explained: “Advice should be sought on any specific situation. However, in broad terms, a payment of less than 100% of wages will normally represent a unilateral change to an employee’s contractual terms.
“Such a change would need consent unless the employer was going to follow a longer route for trying to force a contractual change.
“In practice, we think employees are likely to accept furloughed status. For most, it will be a more desirable outcome than a redundancy situation.”
What are the rules regarding annual leave and furlough?
There are lots of questions regarding annual leave and the coronavirus job retention scheme.
But according to Jo Davis, employment partner at B P Collins: “It is highly likely that statutory holiday entitlement will continue to accrue during furlough leave.
“The Government has passed emergency legislation relaxing the restriction on carrying over the four weeks’ statutory annual leave to the following two leave years, where it was not reasonably practicable to take it in the leave year “as a result of the effects of the COVID-19 (on the employee, the employer, the wider economy or society).
“However, the interaction between annual leave and furlough leave is not currently clear and there are several potential issues with allowing or requiring workers to take annual leave during furlough.
“We await further guidance from the Government to clarify this point.
“A tweet from HMRC Customer Support (which is by no means formal guidance) states that it is possible to take annual leave when on furlough and that such holiday must be paid at full pay. This may be indicative of the guidance that is to come.”
Can an employee have a second job while on furlough?
It may be possible to take on a second job while on furlough, but this is not a clear-cut issue.
Jo Moseley from the Employment law team at Irwin Mitchell said: “Yes. Once you are on furlough you will not be able to work for your employer, but you can undertake training or volunteering work subject to public health guidance, as long as you’re not making money for your employer; or providing services to it.
“It is important to remember that while you are furloughed, you remain an employee and whilst you may also potentially work for a different employer, your contract of employment may restrict your ability to work for anyone else.
“If in doubt, speak to your employer and take legal advice if necessary.”
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Can you refuse to be put on furlough?
Emma Swan, Head of Commercial Employment Law at Forbes Solicitors told Express.co.uk employees “have the right to refuse to be furloughed”, as with any change to employment contracts.
She added: “Companies should clearly explain to employees how their business is being impacted by COVID-19, the risk this presents to jobs, measures they’ve taken to protect the business and how furlough is intended to help secure employment in the long-term.
“This will help in negotiations with staff and their acceptance of being furloughed.
“Businesses should then maintain regular communications with furloughed workers to keep them updated about how the business is adapting, and what this means for jobs.
“Unless a company decides otherwise and makes agreements with employees, there’s no requirement for furlough to change employment terms beyond adjustments to salary and PAYE.
“Furloughed workers will still be entitled to accrue holidays and take annual leave during the furlough period, as per the usual terms of their employment.”
Can casual staff be furloughed?
Yes, casual staff can be furloughed.
As Jo Davis, employment partner at B P Collins, explained: “All employees and workers on the employer’s PAYE payroll can be furloughed.
“This includes those on zero-hours, flexible or agency contracts, apprentices and employees who started unpaid leave or who were made redundant or left employment for any reason since February 28, 2020, if they are rehired by their previous employer.
“Employees and workers cannot work for either the organisation that employs them or a linked or associated entity whilst on furlough.”
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Can you be furloughed more than once?
According to the experts, an employee can be furloughed more than once while the scheme is in place.
Jennifer Smith, Partner at JMW Solicitors, said: “The latest guidance states that employees can be furloughed multiple times.
“Each separate instance must be for a minimum period of three consecutive weeks and one period can follow straight after an existing furlough period.
“When employees return to work, they must be taken off furlough.
“This indicates that employers can rotate employees on furlough, so long as each employee spends a minimum of three weeks on furlough.
“The three-week period is in keeping with the current requirements for as many people to avoid leaving their homes as much as possible.”
What if I get ill while furloughed?
Jennifer Smith, Partner at JMW Solicitors, said: “If the employee is entitled to contractual sick pay which equates to 100 percent of normal earnings, they may remain entitled to pay at that level if they become sick during furlough (on the basis that furlough ends for the duration of their sickness), unless the employer has specifically provided for contractual sick pay to be reduced, to reflect furlough pay in the furlough agreement.
“Employees who are on sick leave or self-isolating and in receipt of SSP cannot be furloughed until their sick leave comes to an end.
“They can be furloughed once they are no longer on SSP.
“If an employee becomes sick during furlough, from the current guidance it seems likely that this will end the furlough period and they should be put on sick leave and paid accordingly.”
Can I still be furloughed if I am self isolating?
David Greenhalgh, Partner – Employment, Joelson, comments: “If you are self-isolating, still on the payroll and there is no work for you to do due to COVID-19, your employer can designate you as a furloughed employee – with your consent.
“However, during the period that you are self-isolating, you will be classed as being sick and therefore you will only be entitled to sick pay (contractual or statutory).”
Paul Kelly, Partner and Head of Employment at Blacks Solicitors, said: “Yes, if your employer decides to classify you as furloughed this can be done whilst you are self-isolating. Your employer should obtain your consent to furlough you and then you will receive 80% of your wage up to a cap of £2,500.”
Michael Redston, Employment Law Solicitor at Aaron & Partners, said: “The existing law relating to sick pay has been changed so that employees will be paid at least Statutory Sick Pay if they are either displaying symptoms of coronavirus or, crucially, if they are self-isolating in line with current government/Public Health England guidance. It is reasonable to conclude that someone who is self-isolating is essentially ‘off sick’.
“If someone is off sick, they continue to be employed but are not working. There has been no specific government guidance on this point, but it is logical that employers will not furlough someone who is already off sick, and given this now seems to include those self-isolating, it seems likely that you can’t be furloughed if you are self-isolating. However, once the relevant isolation period has finished your employer may then wish to put you on a furlough, if the relevant circumstances arise.”
Am I still entitled to furlough payments if I was made redundant?
David Greenhalgh, Partner – Employment, Joelson, comments: “The purpose of the being able to furlough employees is to encourage employers not to make employees redundant during this crisis. If you were made redundant and are no longer employed you cannot be furloughed.
“However, it may be possible for your employer to re-hire you and furlough you with your consent, although there is no guidance yet on whether this approach will be allowed.”
Paul Kelly, Partner and Head of Employment at Blacks Solicitors, said: “Whilst there is no government guidance on this it is likely that if you have been already been made redundant because of the coronavirus following 1 March, your employer may be able to reinstate you and then furlough you so as to make you eligible for payments under the Coronavirus Job Retention Scheme.
“If you have received a redundancy notice from your employer then your employer could, with your consent, withdraw this notice and then classify you as furloughed (again you would need to consent to this).”
Michael Redston, Employment Law Solicitor at Aaron & Partners, said: “Anyone who has been made redundant is no longer an employee and is not entitled to any further payment. However, because the announcement of the Coronavirus Job Retention Scheme was made so suddenly and urgently, some employers who had already made staff recently redundant are contacting them and offering to revoke their termination and put those staff on furlough.
“The Scheme allows for backdating of furlough pay to 1 March 2020, so it may well be reasonable for a redundant employee who was dismissed after this date to ask to be furloughed. But furlough can only be done by agreement with the employer and there is no obligation on them to agree.”
Am I still entitled to furlough payments if I quit?
David Greenhalgh, Partner – Employment, Joelson, comments: “You would only be able to be furloughed during your notice period.
“Once you are no longer employed and on the payroll, you can no longer be designated as a furloughed employee.”
Paul Kelly, Partner and Head of Employment at Blacks Solicitors, said: “No, you need to be employed by the company and your employer needs to categorise you as furloughed, with your consent. This cannot be done if you are not employed by the company.
“If you have given your employer notice to terminate your contract you could ask whether your employer would agree to you retracting your notice and then ask whether they would consider classifying you as furloughed, however, this would all depend on your employer.”
Michael Redston, Employment Law Solicitor at Aaron & Partners, said: “If you have quit and left employment then you are entitled to no further payments.
“If you have only recently resigned and your resignation has not yet been accepted by your employer, then you can withdraw your resignation.
“Depending on the circumstances, your employer may then decide to put you on furlough, but on the other hand they may expect you to continue working either in the workplace or working from home.”
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