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Coronavirus Job Retention Scheme (Furlough) – Employee FAQs

Coronavirus Job Retention Scheme (Furlough) – Employee FAQs – 14th April 2020

SYLO Associates can support and provide advice and guidance on the Coronavirus Job Retention Scheme and can help you to navigate through the process and provide the necessary templates for your use.

Full guidance was issued on 26 March 2020, and subsequently updated on 2nd and 9th April 2020.  These are some of the FAQs we anticipate your employees may ask.

We are, of course, continuing to decipher the detail of the guidance and we will issue updates and additional documents regularly.

The Chancellor announced a new package of financial measures on Friday 20 March 2020 and detailed guidance was issued on 26 March 2020. These measures represent an unprecedented level of financial support to business and employees at this difficult time; albeit subject to an initial period of three-months.

This is a scheme that will allow all UK employers to access financial support to continue paying part of their employee’s salary (up to 80%) for those who would otherwise have been laid off/made redundant as a consequence of the Coronavirus pandemic.

The Government has now published detailed guidance on how the scheme will work and this note summarises the main points.  The full guidance for employer’s is available here.

Guidance for employee’s is available here.

Frequently Asked Questions

Q: What is furlough leave?

The Government have introduced furlough leave to be used in circumstances where the employer cannot continue to operate and generate revenue as it normally would and, therefore, does not have work for their employees.  In normal circumstances, this would result in employees being laid-off or being made redundant. The Coronavirus Job Retention Scheme introduces furlough leave as an alternative to lay-off or redundancy.

Q: What can I do during furlough leave?

During the furlough period, you will:

  • continue to be employed by your current employer;
  • not be allowed to carry out any work for your current employer;
  • continue to receive 80% of your monthly wage (subject to the usual tax, NI, and pension deductions and at the reduced salary rate where this applies) on the usual pay date.
  • continue to accrue annual leave and other contractual benefits;
  • you will be provided with a specified number of days’ notice for you to return to work and end furlough leave.

Other terms and conditions of employment and length of service will not be affected during this period, including your continuous service date.

Although you are not permitted to carry out work for your employer or any associated employer, you may undertake voluntary work.  The Government are seeking volunteers to support the NHS and you can volunteer if you are fit and well and not in a high-risk group.  The link to register to volunteer is here.

You may also consider spending time on your personal development.  There are some excellent free courses available through The Open University and Reed.co.uk.

Q: What pay and benefits will I receive on furlough leave?

You will receive 80% of your usual base pay, capped at a maximum of £2,500 per month.  This will be subject to employee tax, national insurance pension deductions.  The Government Scheme enables employers to reclaim 80% of all furloughed workers pay.

You will also continue to receive your contractual benefits as if you are working and you will accrue annual leave at your standard rate.

Q: What is the timeframe

The Government’s Coronavirus Job Retention Scheme is initially set to run for 3 months, ending in May 2020, but the Government has said that the scheme will be extended if necessary.

Many employers are proposing to furlough employees with effect from 1 April 2020 for a minimum period of 1 calendar month, but this could be extended to 2 months by agreement. If you agree to being furloughed, they will keep the situation under review and will continue to keep you updated.

Please note that the minimum amount of time, as per the rules of the Government scheme, someone must be furloughed for 3 consecutive weeks, therefore you cannot be furloughed ‘part time’.

Q:  Will furlough leave stop and start?

Your employer may ask you to start and stop furlough leave at any time in line with the business requirement for you to undertake work. They will continually review the position regarding any employees on furlough leave in order to ensure that business demands are met.

They will give notice of any proposed changes. The minimum period of furlough leave will be 3 weeks.

Q: What is the selection process for furlough leave?

Due to a downturn in business/reduction in demand/financial challenges, some businesses are in a position where they are proposing to agree a period of furlough leave with some employees. This is an alternative to redundancies or lay-offs.

In order to identify the staff they propose to discuss the potential for furlough leave, they will be adopting a fair and non-discriminatory process. The first step to this is to ask for volunteers. If they do not have enough volunteers from the areas of the business where workload has reduced or diminished, they may seek to identify other roles suitable for furlough leave.

As a reminder, there is no automatic right for you to be made furloughed when you volunteer, as the employer will still need to ensure that they can service their clients and deliver projects. They will consider your role in the company, the temporary loss of skills, the service needs and the impact, amongst other factors.

Q: How do I volunteer to take furlough leave?

If you would like to volunteer to take furlough leave you will need to contact your employer. They will review the applications and confirm to you whether your application has been successful.

They may consider voluntary furlough applications later during the crisis, subject to approval.

You will appreciate that this is a moving situation and  business requirements may change. Businesses will need to adapt accordingly.

Q: What if I am asked to agree to take furlough leave?

If you have not volunteered, your employer may write to you to seek your agreement to take furlough leave.

Please note that, if you do not agree, the alternative options may be:

  • Unpaid leave
  • Redundancy
  • Lay-off
  • Annual leave

Employers believe that this current situation is likely to be temporary and hopefully that by having employees take furlough leave, it will avoid the need for redundancies. However, employers may advise you that if they do not obtain sufficient consent to implement furlough leave under the Coronavirus Job Retention Scheme, they may be left with no alternative but to consider other ways of managing this situation, including redundancy. Therefore, employers are seeking their employees cooperation during what they appreciate is an unsettling time.

Q: Unpaid Leave

Update 17.04.2020 – Confirmation that an employee on unpaid leave may be moved to furlough leave.

Q: What happens to my fixed term contract?

If you are on a fixed term contract, you may be asked to take furlough leave for the remaining duration of the contract. Update 17.04.2020 – Clarification that fixed term contracts may be extended whilst the employee is on furlough leave.

Q: I am a new starter.  Am I eligible to take furlough leave?

New starters who joined after 28 February are not eligible for this scheme and therefore cannot take furlough leave.  If you joined before 28 February, you can volunteer or may be asked to agree to take furlough leave.

If you are in your probationary period, your employer would pause your probation and restart when the furlough period is over.

Q: What if I am off sick or self-isolating?

If you are currently sick or self-isolating due to coronavirus, you are eligible for the scheme and your employer may end your sick leave and start furlough leave.

If you are on sick leave you are eligible to receive SSP from day one of your sickness absence.

Q: What if I am shielding or living with someone who is shielding?

If you, or someone in your household, are shielding in line with public health guidance, you are eligible for furlough leave under this scheme.

Q: What if I have caring responsibilities and am finding it difficult to work whilst caring?

We appreciate that it is difficult to work and provide care for someone who needs it, including children.  The Government have updated the guidance to allow you to apply for furlough leave if this is your situation.

Q: What happens if I am on Maternity/Paternity/Adoption/Shared Parental Leave?

Legally, you must take at least 2 weeks Maternity Leave (4 weeks if you work in a factory or workshop) immediately following the birth of your baby. This is a legal and health and safety requirement.

If you are eligible for Statutory Maternity Pay (SMP) or Maternity Allowance, the normal rules apply, and you will be entitled to claim up to 39 weeks of statutory pay or allowance.

If you qualify for SMP, you will still be eligible for 90% of your average weekly earnings in the first 6 weeks, followed by 33 weeks of pay paid at 90% of your average weekly earnings or the statutory flat rate (whichever is lower). The statutory flat rate is currently £148.68 per week, rising to £151.20 per week from 6th April 2020.

The same principles apply if you qualify for contractual adoption pay, paternity pay and shared parental pay.

NB If an employer ‘tops up’ SMP and your employees are eligible for enhanced company maternity pay, this is included in the wages cost you can claim through the scheme. i.e. you can claim up to 80% of the company maternity pay amount. Update 17.04.2020 – Furlough pay is included in the reference period when calculating statutory pay (maternity, paternity, adoption, shared parental etc).

If you are currently pregnant and due to start Maternity Leave

You will start Maternity Leave as usual. If your earnings have reduced due to a period on furlough or statutory sick pay prior to your Maternity Leave starting this may affect your Statutory Maternity Pay. The same principle applies to contractual adoption pay, paternity pay and shared parental pay.

Annual leave

Q. Does holiday accrue during furlough leave?

Yes, all other terms are conditions remain unaffected during a period of being furloughed, save for any contractual variations (including regarding contractual leave) that may have been agreed.

Q. Can annual leave be taken during furlough leave?

Update 17.04.2020 – The guidance confirms that annual leave may be taken during furlough leave, but it must be paid at 100% of normal pay. If you are on furlough leave, your employer may give notice to you to stop furlough leave so you can take annual leave.

Q: What happens if I cannot take all of my annual leave entitlement due to coronavirus?

In most situations, you should use your annual leave in your current leave year.

This is important because taking holiday helps you to:

  • get enough rest
  • keep healthy (physically and mentally)

During the coronavirus outbreak, it may not be possible for you to take all of your holiday entitlement and you may be getting to the end of the annual leave year with holiday still left to take.

The government has introduced a temporary new law to deal with coronavirus disruption. Under this law, you can carry over up to 4 weeks’ paid holiday over a 2-year period, if you cannot take holiday due to coronavirus.

For example, this could be because:

  • you are self-isolating or are too sick to take holiday before the end of the leave year
  • you have been temporarily agreed to furlough leave or been laid off because there is no work
  • You have had to continue working and could not take paid holiday

This does not affect any annual leave carry over provisions you already have in place in your annual leave policy.

Bank holidays

If you cannot take bank holidays off due to coronavirus, you should use the holiday at a later date in the leave year.

If this is not possible, bank holidays can be included in the 4 weeks’ paid holiday that can be carried over. This holiday can be taken at any time over a 2-year period.

Previously booked holidays

If you no longer want to take the time off you had previously booked, for example because your holiday has been cancelled, your employer may still tell you to take the time off.

If you want to change when you take this time off, you should write to your line manager giving your reasons and they will consider your request carefully. There is no obligation to agree to this request.

Using holiday for a temporary workplace closure

Your employer has the right to tell you when to take holiday if they need to.  They could, for example, shut for a week and tell everyone to use their holiday entitlement.

If your employer decides to do this, they will tell you at least twice as many days before as the amount of days they need people to take.  For example, if they want to close for 5 days, they should tell everyone at least 10 days before.

This could affect holiday you have already booked or planned.

If this is the case, they will:

  • explain clearly why we need to close
  • try and resolve anyone’s worries about how it will affect your holiday entitlement or plans

Disclaimer

  • Please note – this guidance is not intended to be taken as legal advice – for individual situations you will need to take specific legal advice.
  • For any employee queries or issues please contact SYLO Associates
  • The information in this guide is correct as of 14th April 2020.
  • All advice given should be read alongside the Government Guidance at Gov.uk