Posts

The End Of Furlough

/in /by

Sitting at my laptop at midnight on Monday 22nd March 2020 learning about “furlough” provisions for the first time felt so surreal as an employment lawyer. The idea that you could ask your employees to go home and they would get paid (albeit reduced pay) was so novel. It was unclear when the Government would implement a method for employers to recoup the salaries paid at that time. Now we are rapidly approaching the end of the Coronavirus Job Retention Scheme (CJRS) introduced by the Government to pay furloughed workers and employees.

The whole purpose and intention of the CJRS was to assist employers to preserve as many jobs as possible so redundancies were not made. However, the added incentive of the Job Retention Bonus where the Chancellor originally announced in July 2020 that there would be £1,000 bonus paid to employers per every employee brought back was withdrawn when CJRS was extended. Similarly, the Job Support Scheme that was previously intended to replace CJRS has been “postponed”. It is not clear at this time what will happen with either.

Any claims under CJRS for September 2021 pay must be claimed by no later than 14th October 2021 by employers.

What are the likely consequences now the CJRS is ending on 30th September 2021?

  • We may see an increase in redundancies. Redundancy is a permitted fair reason to dismiss but only if there is a genuine redundancy situation and the employer makes the decision to dismiss for that reason fairly.
  • Employers may seek to keep an employee/worker’s pay the same as whilst on furlough – whether they can do this will depend on the wording of the contract of employment and any written Furlough Leave Agreement that was put in place. In most situations, however it is likely to result in a breach of contract/constructive dismissal claim by the employee.
  • Employees being asked to reduce hours – again, this is unlikely to be permissible unless the employee gives express consent.

The Chartered Institute of Personal Development (CIPD) carried out a survey that showed that 22% of employers had made changes to their employee’s terms and conditions since the start of the Covid-19 pandemic. The most common changes were to workplace, hours and pay.

Whether you are an employee facing changes to your employment circumstances; or an employer wondering what to do next, and more importantly, what the law will permit you to do, then please get in touch with us for specialist employment law advice.

[email protected]

Jennifer Carpenter
Solicitor – Employment law specialism
Managing Partner

10 Facts About Furlough Leave

/in /by

The Government’s Coronavirus Job Retention Scheme (CJRS) has been extended to the end of September 2021. However, from 1st July 2021, employers can only reclaim up to 70% of wages for hours not worked (up to the cap of £2,187.50 a month). Nevertheless, the employer must continue to pay at least 80% of the employee’s wages (up to the cap of £2,500 a month) for any furloughed hours. Therefore, from the start of next month employers will have to contribute 10% (up to the cap of £312.50 a month). It is optional whether an employer chooses to top up an employees’ wages above the 80%, but this cannot be reclaimed.

Did you know …

  1. There is no minimum period of furlough leave.
  2. Employees, directors and workers can be included in the Scheme.
  3. Decisions made by an employer as to who should be furloughed can amount to unlawful discrimination if the selection is based on any “protected characteristic” under the Equality Act 2010 (e.g. age, sex, race, religion, disability).
  4. Any reduction in pay whilst on furlough must be agreed with the employee, otherwise it amounts to a breach of contract.
  5. Holiday entitlement will continue to accrue for an employee during furlough leave.
  6. An employer can force an employee to use holiday entitlement whilst on furlough leave.
  7. Employers can carry out a redundancy consultation with employees whilst they are on furlough leave.
  8. Employees can be made redundant whilst on furlough leave, or at the end of furlough leave.
  9. If an employee receives a payment in lieu of their notice entitlement upon termination of their employment the CJRS cannot be used to help pay this.
  10. For the purpose of calculating an employee’s entitlement to various statutory payments, including redundancy pay, this must be with reference to their normal pay, not the pay received whilst on furlough leave.

For more detailed advice, whether you are an employee, worker or employer please consult with our employment specialist – Jennifer Carpenter, solicitor and managing partner.

 

Redundancy and Furlough Leave

/in /by

The Coronavirus Job Retention Scheme (CJRS) has been extended by the Government until 30th September 2021. However, from 1st July 2021 the level of the grant will be reduced and employers will need to contribute towards the cost of employees on furlough leave. Any employee/worker on furlough leave must receive as a minimum 80% of their pay, up to a maximum of £2,500 per month. In July employers will need to pay 10% and then 20% in August and September.

The CJRS is designed to help prevent staff from losing their job if they are unable to work as a result of the Covid-19 pandemic in circumstances where they would otherwise have been made redundant. There is, however no right to demand furlough leave from an employer, and no obligation upon an employee to agree to furlough leave if proposed by an employer. Guidance has already made it clear that furlough leave ,and therefore the CJRS, can be used for employees shielding, unable to work due to child care or other caring commitments. Presently, the scheme is most likely to be used by those in the hospitality, beauty and retail sectors but as the Government’s Roadmap moves forward this should reduce those unable to work due to pandemic related restrictions.

Does furlough leave have to be at full pay?

No, but for furlough leave to be lawful, and not in breach of contract, the staff member must give express consent, including to a reduction in their pay. An employer can choose to top up the pay to the full amount if they wish, but is only a legal requirement of CJRS that the employee receives a minimum of 80% pay (subject to the cap).

Does furlough leave have to be full time?

Since July last year furlough can be used flexibly so staff can work some of their contracted hours, or be on a rota system whereby they take it in turns with colleagues to be on furlough leave, or be working.
Can redundancies be made whilst staff are on furlough leave?
An employee can be made redundant whilst on furlough.

What is the position with regard to notice?

Full notice must be given and at full pay.

Is the rate of pay for redundancy affected for those on furlough leave?

Statutory redundancy payments for those that are eligible must be calculated by reference to a normal week’s full gross pay, not furlough pay rates.

If you are considering making redundancies then we can give you the legal advice and guidance to enable you to adhere to the statutory requirements and procedures; or to help explore alternatives with you. Please call us on 01799 523441

What Happens When The Furlough Scheme Ends?

/in /by

The Five Rs

The Coronavirus Job Retention Scheme (CJRS) was introduced in March by the Government to enable organisations to keep staff on payroll and not make them redundant but send them home. It served two purposes – ensuring people stayed at home at the height of the Covid-19 pandemic, whilst enabling people to keep their jobs. As it is fundamental to the employment relationship that the employer provides work and the employee undertakes work in order to avoid a breach of contact, the furlough period could only be put in place with the employee’s express agreement. “Furlough”, prior to March was not a term that had ever been used in relation to employment contracts/relationships.

Employers are now contributing to the scheme but with the Government still contributing 70%. In October employers will be contributing 20%. The Chancellor has made it clear there will be no further extensions to the scheme. It will end on 31st October.

So, what happens to the millions of people on furlough on 1st November:-

RETURN TO WORK – the ideal would be that the staff member returns to their job and full pay. There is no specified notice period that should be given to an employee that they are required to return, unless something specific was agreed at the start of the furlough leave.

REDUCTION IN HOURS/PAY – this can only happen if the staff member agrees to this. An employer cannot force a reduction in hours or pay. Some employees may be willing to agree to this to avoid losing their job.

REDUNDANCY – if the employer has become insolvent then there will be a redundancy situation. If the employer cannot afford to pay redundancy then the Government National Insurance Fund scheme may be able to assist employees. Employees will only be eligible for statutory redundancy pay if they have at least two years continuous employment. Redundancy pay should be calculated in accordance with the employee’s full pay, not any reduced pay whilst on furlough. If the employer no longer has a need, or has a reduced need for employees of a particular kind, this will fulfil one of the statutory definitions of redundancy. How the employer consults and selects those identified for redundancy will determine whether a dismissal for redundancy is fair in accordance with the Employment Rights Act 1996.

REMAIN AT HOME – the employer could discuss with staff the idea of working from home to assist with social distancing in the workplace. An employee cannot be forced to work from home if their contract of employment provides for a different place of work.

REFUSE TO RETURN – if an employee refuses to come back to work the employer will need to address the reason for the refusal and possibly address any concerns that mean the employee will not/cannot return, including if they are vulnerable and have worries about Covid-19 transmission.

If the employee is not invited back to work and/or is kept on reduced pay then this is likely to amount to breach of contract and potentially a constructive unfair dismissal.

Time is running out. If a genuine redundancy situation arises then the employer must still give notice that the employment is ending for this reason. The contract may dictate the notice period, but statutory minimum notice periods will apply in that one week’s notice for each complete year of service must be given, up to a maximum of 12 weeks.

If an organisation plans to make more than 20 staff redundant there must be a minimum consultation period before any notice of termination is given of at least 30 days.

It is going to be a difficult time for employees and employers so we are here to give the legal advice to guide you through it.

Contact Jennifer Carpenter, solicitor and partner with 20 plus years of providing employment law advice and representation to employees and employers.

Further Government Announcement On Furlough Scheme

/in /by

Yesterday the Government announced that in relation to the Coronavirus Job Retention Scheme (CJRS) that whilst it will close to new entrants at the end of June this will not be applicable to parents on statutory maternity and paternity leave who return to work in the coming months even after 10th June cut-off date.

However, this will only apply where they work for an employer who has previously furloughed employees.  An important announcement that has dealt with what would otherwise would have been an unfair and discriminatory situation for those that have been on maternity or paternity leave.

Our employment law specialist, Jennifer Carpenter, solicitor and partner can answer any queries or concerns you have about furlough leave, employment terms, redundancy and other employment related issues.

Furlough Leave Update

/in /by

10th June 2020 – this is the last date for workers/employees not previously furloughed to be placed on furlough leave and for the employer to benefit from the Coronavirus Job Retention Scheme (CJRS). The scheme will close to new entrants on 30th June, meaning that from 1st July employers will only claim under the CJRS who have previously been furloughed for a minimum period of three weeks prior to 30th June. 10th June is the very latest to have had three weeks on furlough before the end of the month.

The CJRS will have greater flexibility come 1st July where furloughed employees/workers will be able to work less than their usual working hours and employers will pay them for the hours worked. The CJRS will continue to make furlough payments for the remainder of their normal hours that they do not work, up to a maximum.

IMPORTANT FACTS TO REMEMBER:-

  • There is no legal right or entitlement to be placed on furlough leave, although an employee/worker could make a request to be considered for such leave to their employer. It is, however the employer’s decision.
  • There is no right to receive redundancy instead of furlough leave.
  • There is no right to be placed on furlough leave as an alternative to redundancy.
  • An employer cannot force furlough leave upon an employee.
  • An employee cannot be required to use annual leave entitlement whilst on furlough leave.
  • Employers can furlough staff who are required to stay at home because they are shielding in line with Public Health Guidance, or because they need to stay at home with a family member that is shielding.
  • Non-discriminatory criteria must be used by the employer in selecting who to place on furlough.
  • An employer should be aware that a claim must not be made under the CJRS if it is abusive or otherwise contrary to the “exceptional purpose” of the CJRS, which is stated to be the payment of employment costs in respect of furloughed employees “arising from the health, social and economic emergency in the United Kingdom resulting from coronavirus and coronavirus disease”.
  • Employers are not legally obliged to “top up” the CJRS pay to the employee/worker.

Our employment law specialist, Jennifer Carpenter, solicitor and partner can answer any queries or concerns you have about furlough leave, employment terms, redundancy and other employment related issues.

Furlough Leave Update Information

/in /by

All employers and organisations please be aware that in order to qualify for the subsidy from the Government’s Coronavirus Job Retention Scheme all employees/workers furloughed must have been given written instruction that they cannot do any work for the organisation that has placed them on furlough, and have consented to this in writing. This is contained in the Treasury Guidance to HMRC dated 15th April 2020.

The scheme has very recently been extended until the end of June.

For all your furlough leave questions answered, whether you are employer or employee, please contact our employment specialist Jennifer Carpenter, Solicitor and Managing Partner.

Some FAQs About Furlough Answered

/in /by

Some FAQs about furlough, answered by employment law specialist, Jenny Carpenter, Solicitor.

Do you have to be employed to be placed on furlough leave?

No, the Coronavirus Job Retention Scheme applies to the self employed, contractors and zero hour workers.

Can furlough leave be used for those shielding at home from Covid-19 as they are in the vulnerable group of individuals?

Yes, the Scheme Guidance makes it clear that those that are shielding in line with public health guidance can be placed on furlough leave by their employer. However, this is only the case if the employee cannot work from home and would otherwise be made redundant.

Can a worker/employee with caring responsibilities be placed on furlough leave?

Yes, if for example an employee is unable to work because there is no child care provision (particularly relevant as schools are closed) then they can volunteer for furlough leave. However, an employer is not obliged to place an employee/worker on furlough.

Can apprentices be placed on furlough leave?

Yes, and they can continue with training during this time, but not work.

Can a furloughed worker/employee undertake voluntary work whilst on furlough leave?

Yes. But not for the organisation that has placed them on furlough leave.

Can paid work be done by a worker/employee on furlough leave?

This depends. Paid work cannot be done for the organisation that placed them on furlough. However, if the worker/employee’s contract of employment permits them to have more than one job then there is no reason why they cannot take up paid work elsewhere.

Can a Nanny be placed on furlough leave?

Yes, the Guidance makes it clear that those employed by individuals can be placed on furlough. However, they must be paid through PAYE payroll and have been on the payroll as at 28th February 2020.

Can a director of a company be placed on furlough leave?

Yes, provided the decision is made by the Board of Directors and documented. It does of course mean that the director cannot then do any work for or on behalf of the Company during the period of furlough. The director can though carry out his/her statutory obligations under the Company Act 2006.