31st March 2020 under Employment Law by Sara Devennie and Anna Harbinson
The Government has now published more detail about the Employee Retention Scheme. You may also have heard this referred to as being ‘furloughed’.
The scheme enables employers to retain staff on their payroll where they are unable to operate or where is no work available for employees to do because of COVID-19. This will hopefully avoid the need for redundancies and ensure that jobs are still in place when the pandemic ends and businesses reopen.
To be eligible for the scheme you must be paid through the PAYE system and you had to be employed on 28 February 2020. If you were employed on this date, but were subsequently made redundant, your employer can re-employ you and then furlough you.
Your employer can claim up to 80% of your monthly earnings from the Government capped at £2500 gross per month. Whether your employer pays you at a rate of 80% for this period or tops your wages up to 100% will largely depend on what your contract states. Payments will still be subject to tax and national insurance deductions in the normal way.
Payments start from the first day of furlough, but can be backdated to 1 March 2020 if you are already absent from work on this basis.
You cannot ‘self-furlough’. However, there is nothing to stop you from discussing this option with your employer. Likewise, you cannot be forced to furlough. However, you should consider this option carefully because if you choose not to be furloughed, then you may be placed at risk of redundancy.
You must agree with your employer to be furloughed and employers must confirm this arrangement in writing. You can be furloughed for a minimum of 3 weeks, and at present for up to 3 months (although this may increase depending on Government guidance in the coming weeks). You can be furloughed more than once, so for example, you can be furloughed for 3 weeks and then again for a further 3 weeks once this has ended.
Your employer does not have to furlough their entire workforce but they should be careful not to discriminate when selecting who should be furloughed.
During periods of furlough you must not undertake work for your employer. You are, however, still permitted to carry out voluntary work, such as volunteering for the NHS Coronavirus service.
The scheme is currently expected to be up and running by April 2020. We will continue to provide updates as more information becomes available.
In the meantime, if you have any questions about this or any other questions relating to your employment, we are still here to help, so please do not hesitate to contact Sara Devennie or Anna Harbinson in our Employment Law Team on 0191 232 3048.
Sara Devennie (Solicitor) and Anna Harbinson (Paralegal)