Furlough is a temporary leave of absence from work. Employee’s will retain their employment contracts and accrue annual leave and pension contributions and all other terms and conditions. They will not be required to attend work and will receive up to 80% of their salary through the ‘Job Retention Scheme’, for up to 3 months. More information can be found on the .gov website: https://www.gov.uk/government/publications/guidance-to-employers-and-businesses-about-covid-19/covid-19-support-for-businesses.
Do employees need to be offered to take furlough formally?
Yes, you are required to write to them explaining what this means and providing a future date of when the leave is effective from.
Do employees need to agree to take the furlough?
Yes, the agreement can come in various forms, either a returned signed letter or by a text message as long as there is an agreement in place before the commences. Currently, you cannot assume that if they are not attending work that they have accepted the offer to take furlough leave.
How are employees selected for furlough?
It is to the discretion of the business. The business needs to put itself first and work out what it needs to keep running. You would look to offer it first to individuals that are shielding themselves, if they live with someone that is potentially vulnerable and people at risk. You would also be seeking for volunteers to step forward as well as well as looking at any new starters that cannot undertake work without supervision. Do ensure there is no risk of indirect discrimination of a group, when selecting individuals to go on furlough leave.
How is annual leave calculated whilst employees are on furlough?
Annual leave will be calculated based on the average of the last 12 weeks of working.
Can employees work whilst they are on furlough?
They should not be undertaking any work whilst on leave. It is hard to police. But as an employer you have a duty to ensure they are not undertaking any work unless it’s training.
What communication is permitted to the furlough workers?
Anything that is related to training is permitted. In order to support employees whilst on leave some level of communication regarding the businesses’ plans would be adequate. Take the same approach that you would for anyone on maternity or sick leave.
When does furlough start for employees?
You are required to notify them of a future date of when furlough begins. Any leave taken before that is annual leave or unpaid leave.
Can employees refuse to work if there is work?
Requesting individuals to work is a reasonable management request. You would ideally try to resolve the situation as informally as possible before it went formal. You would look at each case individually. Maybe their circumstances haven changes and they may have individuals or children that are vulnerable or high risk. Always try and reassure them of your safety measures you will be taking.
What if the work they are being offered is an increase to their existing part time hours?
Refer to your employment contracts, if there is a clause stating you can request employees to work additional hours/overtime to meet the needs of the business, then you can request they do and they can only refuse on the grounds as stated previously. However, it’s best practice to get the employee’s agreement if you plan to make any changes to their contract, with a variation to contract letter.
How can employers and employees keep in touch?
Many employers have set up WhatsApp groups or groups on social media. Some have added blogs to their websites and obtained consent to send emails to personal emails. Some use other internal communications systems. Some employers are doing Zoom calls for fun as well as meetings and some are doing webinars. Managers have already started checking in with their direct reports once a week.
What if an employee is on probation during the period they are on furlough?
Don’t let the probation automatically roll over. If their review is due, it’s best practice to carry it out. If there is an extension clause in the employment contract you may extend if performance isn’t satisfactory.
Do we have to re-induct employees when they return to work?
You would want to do a de-brief or a review of some kind with them. It could take some time for some individuals to readjust. There maybe COVID-19 tests available at the time of their return. You would more than likely want to carry out a risk assessment when they return and with some that have had the virus, you would be looking to seek a ‘Fitness to work certificate from their Doctor advising they are fit to return to work.
Do all employees have to furlough at the same time?
No, they can furlough at different times and you can rotate employees around between working and being on furlough as long as they are on furlough for a minimum of 3 weeks at any one time.
Can you back date furlough?
No. You would need to put them on furlough from a future date. As furlough is only available for the next 3 months, you would want to put them onto furlough as soon as possible.
What happens after the 3 months?
You would be reviewing your employment contracts to see if you can lay them off or put them on short time working. If you did carry out redundancies, it’s recommended you get some sound HR advice, especially when there are more than 20 employees being laid off at any one time.
How long is the option to furlough employees available for?
Until 31st May 2020. There has been no guidance as to whether this will be extended. The scheme started on 1st March 2020, but you are not able to back date the pay,
What if someone resigns or is asked to leave your business, during furlough?
They are treated the same as if someone was on sick leave or annual leave. They are not in work, so they are working their notice whilst being at home. They can be asked to work during their notice period, but the pay must be more than the 80% of the salary from the Job Retention Scheme.
What happens if someone refuses to go on furlough?
Of course, they can refuse, but it may not be in their best interests if they do. Initially try and have informal discussions with them to establish what is behind the refusal and try and resolve the issues. If you cannot resolve the issues, then you would seek HR advice and refer to your employment contracts and handbooks. If you have the right to lay them off, then you could ask them to take leave from work, but this is unpaid.
If you do not have the right to lay them off, then you would be looking to make their role redundant.
Will they receive contractual benefits when on furlough?
They will continue to accrue annual leave; occupational pension and all other benefits should be paid.
Will they keep their employment rights, and will their service be unbroken?
They will keep their employment rights and their continuous service will be unbroken.
Is there any type of work they can undertake whilst being on furlough?
Employees cannot do any work whilst they are on furlough. They can do volunteer work, or training if this does not provide services to or for the employer or generate revenue for the employer.
Can employees do a little bit of work here and there?
Employers will be audited for potential fraudulent claims. Employers cannot encourage employees to undertake work for or on behalf of the employer that has furloughed them. Any work could jeopardise your ability to claim the grant for the Job Retention Scheme.
How much can employers claim?
They can claim for up to 80% of a furloughed worker’s salary (capped to £2,500 gross), per month. Plus, the employer’s NI contributions.
Fees, commission as well as bonuses can’t be claimed for.
What is pay varies for employees?
You would look at their previous years’ earnings or for the last 12 months.
Do we have to top up the 80%?
That is discretionary.
What about pension payments?
You will continue to pay your contributions and your employees will pay theirs. You can claim the minimum mandatory employer pension contribution, which is 3% of the employee’s income per month.
What about other benefits such as dental cover, health care plans, death in service?
You should continue to pay these to the employees, unless you agree otherwise with the employee. If the business is suffering financially, often businesses’ look at on costs for employees first and try and negotiate with their workforce a reduction in these or to remove them temporarily or permanently.
Employers that offer death in service should speak with their providers to establish if the pay out will be affected should there be a shortfall in income.
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