What is a ‘Furlough Leave’?
- The Government have announced a new Coronavirus Job Retention Scheme where employers can agree with their employees to change their work status to a furloughed worker.
- This is a new concept in UK employment law which means the employee is on a period of leave but still employed by you.
- This is expected to last for three months but will be kept under review.
- Unless there is an express lay-off clause within the contract, your employee would need to agree to change their status which should then be documented in writing with detail of how this impacts the rest of their contractual entitlements. We expect that their length of service and continuous employment will be unaffected by this.
- During this time the employee would not be able to do any work for you.
- It is not compulsory for employers to make use of the scheme but the government is encouraging employers to do all that they reasonably can to secure employees’ jobs and in return they are providing financial support by way of the Coronavirus Job Retention Scheme.
What is the Coronavirus Job Retention Scheme?
- The scheme is accessible to all employers once they have designated their employees as furloughed workers
- Employers will need to notify HMRC that they have done this using a new online portal due to be set up soon.
- The Government will reimburse 80% of the furloughed wage costs, up to a maximum of £2,500 per month per employee.
- There is no obligation on employers to top up the 80%.
- Employers with short term cash flow concerns should consider applying for a Coronavirus Business Interruption Loan.
What if I have already put employees on lay-off or made them redundant?
If you have already taken steps to lay-off or make your employees redundant prior to the announcement of the Coronavirus Job Retention Scheme on 20 March 2020, then it has been suggested that the scheme will be taking affect from 1 March 2020 and that it is possible to reinstate those workers with their agreement as furloughed workers.
For initial queries please have a read of the Q&A, or for any queries that are not covered, NFU Employment Service members can call our Helpline on 0370 840 0234.