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. 

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