Furlough: The Coronavirus Job Retention Scheme
We have advised many about the issues arising from the introduction of this scheme which was announced on 20 March 2020. The cut off date has been extended to 19 March 2020.
There are strict rules applied to implementing the scheme which are set out in section 76 of the Coronavirus Act which was published on 4 April and can be found on the gov.uk website. It is a Grant. It does not alter existing statutory employment rights such as right not to be dismissed unfairly, the right to a redundancy payment, protection from discrimination or rights to be paid for annual leave. It also means an employer cannot reduce an employee’s pay whether they are required to work fewer hours or no hours, without express contractual authority to do so. There does exist a common law right to tell employees not to attend at work but, in the absence of a contractual right, no right not to pay them.
The contract must expressly permit a change before one can be made; or there must be fresh agreement between employer and employer to implement the change. It is likely that many employers will be negotiating a fresh agreement to implement change, if this is affecting you either as an employer or employee, then you must seek advice.
It is a grant which is intended to support employers to keep employees in employment rather than making them redundant. It applies to all employers, small or large, charitable or non-profit, limited companies or sole traders. The scheme applies to all categories of workers paid via PAYE.
Under the scheme initially for a 3 month period the government has undertaken to reimburse 80% of wages of a furloughed employee up to a maximum of £2,500 per month. Applications for the grant started on 20 April 2020 and payments will be available from the end of April being backdated. Employers do not need to top up the remaining 20% of pay though, however that will be subject to the contractual position and any negotiations.
Contact us if you are currently experiencing difficulties in this area
You can also visit the government website below