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An essential ‘Furlough Scheme’ update

Posted
May 14, 2020
Business Law

By now, you will no doubt be aware of the Coronavirus Job Retention Scheme (CJRS) and the basic way in which it works. However, much has changed over the last few weeks. So this article summarises some of the key developments in our understanding of how the CJRS operates.

Do you need written consent to furlough someone?

There has been a lot of debate about the extent to which employees need to provide their express consent to be furloughed. Whilst the precise position remains a little uncertain, it now appears clear that:

  1. Employees need to consent to any relevant changes to their contract of employment (including the requirement not to undertake any work during furlough); and
  2. the relevant arrangements must be confirmed in writing. 

Employers will need to retain a record of their communications with staff for a period of at least five years.

What about holiday?

We already knew that holiday continues to accrue during furlough. We also knew that employees who are unable to take their holiday in the current holiday year (because of coronavirus) may be able to carry it forward into the next 2 holiday years. However, there has been an ongoing debate about the extent to which employees can take (or even be required to take) holiday during furlough. 

It now appears clear that employees can take holiday during a period of furlough, without bringing furlough to an end. Furthermore, very recent guidance published by the Department for Business, Energy and Industrial Strategy suggests that employers may be able to require workers to take holiday while on furlough. However, the guidance is couched in terms that are sufficiently uncertain that employers will  need to assess the risks very carefully. Given current social distancing requirements, will any ‘enforced’ holiday really result in the necessary rest, relaxation and leisure time that European laws require?

Insofar as employees are taking holiday during furlough, employers will need to carefully consider the position in relation to pay. It is likely to be insufficient simply to pay ‘furlough pay’ (80% of normal pay, up to a maximum of £2,500). Instead, it may be necessary to top your employees’ pay up to the level of their ‘normal’ remuneration. The additional cost over and above the value of the CJRS grant will need to be covered by the employer.

Further details and copies of the full DBEIS guidance can be found via the following link:

https://www.gov.uk/guidance/holiday-entitlement-and-pay-during-coronavirus-covid-19 

Further changes on the way?

The CJRS was initially put in place to cover the period from March to May 2020.  The scheme was then extended to cover all of June and we now know that it will continue in some form or another until the end of October.It will remain unchanged until the end of July, after which we expect it to become more flexible. The scheme is expected to allow employees to begin to return to work on a part-time basis. However, Rishi Sunak (the Chancellor of the Exchequer) has indicated that from August onwards, employers will be expected to make an increased financial contribution towards the cost of their employees’ wages. Precisely what all this means for businesses is currently unclear.  Further details are expected before the end of May, so keep your eyes peeled.

Thinking of opening up again?

If you are thinking of reopening your business, ‘unfurloughing’ your staff and increasing the number of people required to attend work, you will need to carefully follow the Government's new guidance on creating a "COVID-19 Secure" working environment. You will need to conduct a formal risk assessment and work out how to manage the risks identified. You should consult with staff regarding the content of your risk assessment and you ought to consider publishing it on your website, especially if you have more than 50 employees working for your business. There are 8 sets of detailed guidance, dealing with different types of workplaces, that have been published by the Government in order to assist companies with the process of returning to work. Further details can be found on the link below:

https://www.gov.uk/guidance/working-safely-during-coronavirus-covid-19

Need a hand?

If you need specific advice and guidance on using the CJRS within your business, please contact James Willis (Head of Employment Law) on 07917 712257.

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