Furlough Explained

Many businesses across the UK have been experiencing a downturn in revenue as a result of the worldwide covid19 outbreak and had to make some difficult decisions about staffing levels.

On Friday 20th March 2020 the government announced that they would support businesses and staff by introducing a Coronavirus Retention Scheme. The scheme means that the government will pay up to 80% of an employees salary up to the value of £2,500 if they have been furloughed during the pandemic.

The big question is what is Furlough and how do you do it?

The general rule is that employers have an obligation to provide work for employees (not zero-hours workers) as stated in the employment contract. This means that you are still required to pay your staff for their contractual hours if you send an employee home due to a shortage of work.

However, you will not have to pay employees to stay at home if you have the right to lay-off (also known as furlough) their staff. 

Lay off or furlough is not redundnacy or dismissal and they continue to accrue annual leave and other employment rights during this period. Lay off us usually or reduced pay with a minimum payment of £29 per day for 5 days within a 30 day period. In this instance, the staff will be paid a reduced salary.

Do I have the right to furlough staff?

Employers can furlough staff if they have a contractual right to do so. This is often termed as a lay-off clause in the contract.

If you have a lay-clause you must still follow some rules including:

  • Explain to staff what lay-off means
  • Tell staff of their rights during lay-off
  • Tell staff how long you expect the lay-off to last
  • Tell staff how much pay they will receive.

What if I don’t have a  lay-off clause in the contract?

The Coronavirus Retention Scheme is still subject to current UK Employment Law. This means that if you do not have a lay-off clause contract you will need to negotiate with staff to add an additional lay-off term.

At the moment, many staff are agreeing to the term but you cannot force them to do so.

It is important to note that any amendment to the terms of employment should be done in writing.

Choosing who to furlough

If all staff are not subject to lay-off it is important that you have a clear and transparent selection criteria for who will be laid-off.

Employers should be careful not to discriminate on the against staff on the grounds of 

  • Race
  • Age
  • Gender
  • Sexual Orientation
  • Marital Status
  • Pregnancy or Maternity
  • Religion or belief
  • Disability

We hope that you have found this information useful, Contact us at info@orchardemploymentlaw.co.uk  if you would like advice or help with documentation for furlough or any other HR matter. 

Questions & Answers on Managing Staff Who Isolate Due To Coronavirus

We are all aware of COVID-19, the Coronavirus which is spreading throughout the world. We are, also, all aware of the preventative measures which we all need to be thinking about and doing in order to help stop this disease from spreading further.

Therefore, we did not want to give you another generic blog post preaching about and reminding you of all the things that you’ve already heard and read.

Instead, we thought it would be much more useful for you all to have some practical steps about what to do in your business in relation to COVID-19.

Question

What should I do if a member of my staff cannot attend work because their child’s school is closed and they do not have childcare?

Answer

Just because your business is staying open and your staff are well and have not been told to self-isolate, their children’s schools or childminders may decide to close, perhaps for a deep-clean, which means that some of your staff have no childcare and, therefore, might be unable to work.

You are under no obligation to pay staff who are unable to attend work but it might be a good idea to think about what staff could do if they have no childcare.

Perhaps think about allowing staff to arrive later at work, work from home or make up their hours on another occasion, and perhaps even allow them to bring their children into work. Of course, you need to ensure that the child in question is well and also not showing any signs of illness. They also need to be aged over 8 years old for insurance purposes. Allowing children into the workplace is a great way to give some educational, interactive and inspiring experiences to school-aged children, and also takes the pressure off their parents a bit as well.

Get the children involved in simple tasks and keep their minds occupied. But make sure that your insurance covers you when children are in the workplace.

Parent’s are also entitled to take parental leave which is unpaid leave to look after children.

Question

What should I do if a member of my staff has not been informed to do so by NHS 111 or their GP but still chooses to self-isolate?

Answer

If a member of staff is showing no signs of illness and has not been advised to self-isolate by a medic, but they still CHOOSE to self-isolate, you are under no obligation to pay that staff member.

However, it is good practice to allow the member of staff to take annual leave or unpaid leave or have alternative working arrangements.

Question

If I choose to close my business down for a period of time, do I still have to pay my staff?

Answer

You are under a legal obligation to provide work for permanent staff (unless you have a lay-off clause in your contract).

If you feel it necessary to close your business premises then, if possible, you could ask your staff to work from home or another location in order for you to not have to close down completely.

If you do not have a lay-off clause and you are unable to offer home-working or provide any work then you will still be required to pay your staff their normal wage or salary.

You can also force your staff to take annual leave. However, we strongly recommend against this unless it is absolutely necessary and you must give them 2 days notice for every day you want them to take off. Of course, you could ask your staff if they would prefer to take annual leave but we would recommend that they be the one to make that decision.

Question

What is the current legislation in relation to Statutory Sick Pay and Coronavuris?

Answer

Last week, the Prime Minister announced that the Government will be initiating emergency legislation in relation to Sick Pay.

It is proposed that the new Law will allow staff who self isolate to reduce the spread of Coronavirus to receive Statutory Sick Pay (SSP) from day 1 of isolation.

Although this is emergency legislation, it could still take up to 3 months to come into effect.

Currently, staff who are unwell and earn on average at least £118 per week are only entitled to Statutory Sick Pay from day 4 of illness.

Employers are encouraged to pay Statutory Sick Pay to staff who self-isolate even though the law only applies to staff who are unable to work due to illness (or medical recommendation) and not those who self-isolate by choice.

Do you have more questions?

For further advice and guidance in relation to staff and Coronavirus or any other Employment Law query, contact us on 01634 564 136 or email us at info@orchardemploymentlaw.co.uk