No doubt you have seen a lot of information in recent weeks regarding the UK’s Furlough scheme, with guidance issued by the government still being updated periodically. As a result, I have been receiving a lot of Furlough related queries and therefore thought it would be helpful to put a Q&A together covering some of the things that I am asked about most often. Please note that this information is correct as at 5th May 2020 and is subject to change.
If you need to check the latest guidance or require any advice, please visit the government website below or feel free to contact me for a no obligation chat on:
Tele 07913 121290
QUESTIONS AND ANSWERS
PUTTING STAFF ON REDUCED OR ZERO PAY – If there is little or no work for my staff, can I lay them off on zero pay, only pay them for any reduced hours that they work or reduce their overall pay?
- You can only lay staff off, reduce their working hours or reduce their pay if their Employment Contract / Statement of Main Terms says you can. Otherwise employees are still entitled to their full pay, even if they have no work to do or they work fewer hours than usual.
- You could, however, consult with staff to gain agreement to temporary changes to their contracts – See next question.
TEMPORARY CHANGES TO EMPLOYMENT CONTRACTS – How do I get my staff to agree to a temporary change to their contract, allowing me to place them on Furlough?
- Consult with your staff as a group and individually. Be honest about the situation that the business is in, how this is affecting work volumes and the potential impact that this could have on jobs in the future. In order to try and safeguard their jobs you would like their consent to place them on Furlough. The alternative would be to potentially make people redundant, which you would prefer not to do.
- If 20+ staff are impacted, it will be necessary to engage in the collective consultation processes via your Trade Union representatives to gain agreement to temporary changes to terms of employment.
- Any employee who agrees to be Furloughed must be issued with a letter which explains:
- a temporary change is being made to their contract
- their status will now be changed to “Furloughed Worker”
- the date Furlough will begin
- how long they are being Furloughed for
- how much they will be paid while Furloughed
- when the situation will be reviewed
- the processes in place for remaining in contact while on Furlough.
- The letter will need to be kept on file for at least 5 years.
- Whilst it is not currently stated that employees have to sign this letter to confirm their agreement to the change, for future dispute or audit purposes it would be sensible to ask them to do so.
- If an employee refuses to agree to the temporary contract change, please seek advice on how this might be resolved.
HOW MANY EMPLOYEES CAN BE FURLOUGHED – Do I have to Furlough all of my staff?
- You can select which employees that you want to Furlough and those who you would like to continue working. Alternatively, you can Furlough your entire workforce if you wish.
SELECTING EMPLOYEES TO BE FURLOUGHED – How do I select which members of staff are to be Furloughed?
- To decide which employees are to be Furloughed, you will need to demonstrate that you have followed a fair and reasonable selection process – in the same way as if you were looking to make some employees redundant.
- All equality and discrimination laws will still apply when selecting employees for Furlough.
- A fair selection process will need to be used whether you are paying the 80% Furlough rate or topping it up to 100%.
- To make your decisions, use a list of objective criteria so that you can demonstrate that you have fairly assessed and scored your employees in the same way.
- The selection criteria could include things like: the ability and skills required to complete the available work, performance or disciplinary records, attendance records (take care that this doesn’t discriminate against anyone with a disability), qualifications, relevant work experience etc
- The decision making process will need to be documented and details retained for at least 5 years.
- Alternatively, you could ask for volunteers or rotate your Furloughed staff every 3 weeks eg 3 weeks on Furlough, 3 weeks back at work etc
FURLOUGH TIMESCALES – How long can I Furlough my staff for?
- Furlough has to be for a minimum of 3 consecutive weeks, during which time employees cannot do any work at all for the company that has Furloughed them or any associated businesses.
- Employees can return to work after 3 weeks and can then be Furloughed again at a later date if need be.
- Employees can be furloughed multiple times, returning to work in between, but each separate period on Furlough must be for a minimum period of 3 consecutive weeks.
- If an employee is to be Furlough for more than 3 consecutive weeks eg 4 or 5 weeks, this can be done in one go (rather than an initial stint of 3 weeks, immediately followed by the remaining period).
- Furlough does not have to be applied in full weeks eg it could be for 4 weeks and 2 days.
- There is no maximum period that employees can be Furloughed for, however bear in mind that the scheme is currently only running until 30th June 2020.
PROBATIONARY PERIODS – What do I do if an employee is still in their probationary period during the COVID-19 outbreak?
- Employees who are still on probation during COVID-19 can have their probationary period extended.
- You should write to the employee, explaining that due to COVID-19 and the fact that the employee is on Furlough leave, their probationary period will be extended until [date] as you have not been able to assess their performance.
EMPLOYEE RIGHTS – What rights do Furloughed employees have?
- Staff will retain all of the employment rights that they previously had.
- This includes rights to:
- Holiday accrual
- Statutory Sick Pay
- Maternity and other parental leave rights
- Rights against unfair dismissal
- Redundancy payments
- However, you may need to calculate your employee’s average weekly earnings differently, if your employee was Furloughed and then started any leave on or after 25 April 2020 for:
CLAIMING THE FURLOUGH GRANT – How do I claim the Furlough payment for my staff?
- Full details on how to claim the Furlough grant can be found at:
IMPORTANT – RECORD KEEPING / HMRC AUDITS – What paperwork do I need to keep in case of future disputes / claims from employees or an HMRC audit and how long do I need to keep it for?
- To prevent your employee from doing any work and avoid putting your Furlough grant at risk:
- Gain agreement in writing or by email to stay in touch via your employee’s personal email address rather than a work email address (to avoid any temptation to respond to work emails)
- Block their access to work systems
- It is important to make a record of and fully document any discussions that take place with employees and / or Trade Unions.
- Keep copies of all emails, text messages, letters or other correspondence with employees and / or Trade Unions.
- Keep a record of any decision making processes and selection criteria used to fairly select employees for Furlough.
- Retain all documents and records together in a safe place for at least 5 years.
SUPPORTING STAFF ON FURLOUGH – What should I do to support my Furloughed employees?
- Communication is key. Find out where your Furloughed staff are hanging out eg on Facebook, WhatsApp, Zoom etc then hold regular catch up video calls with them all as a group, to provide a general update on what is happening, ask how people are feeling and to thank them for their support. This could be in the form of a coffee morning or could include a quiz etc. But remember, people may have childcare, homeschooling responsibilities etc, so hold the calls at times that work for everyone. NOTE: Be careful to not include any discussions that generate any input into work matters as this could impact your Furlough grant.
- Move ownership of any team calls around the group for greater involvement and engagement.
- Speak to everyone individually, thank them for their continued support and ask what you can do to help them. Don’t be judgemental. Make sure that they know that it is a safe environment to raise any concerns. Listen to how they respond. Don’t just take their word for it when they say they are “fine”. Remember that everyone is different. They may not only be concerned about their job, catching the virus, their financial situation etc but may also have struggled with the change in routine, being ill themselves or suffered a bereavement. So probe a little deeper when you chat eg
- “..are you sure you’re ok?..”
- “..I noticed that you don’t sound like your usual self..”
- “..I sensed that you were..”
- Make sure all of your staff are aware of:
SICK PAY, SICKNESS ABSENCE AND SELF ISOLATION – If an employee is self-isolating or they are absent from work due to sickness, are they paid Sick Pay or put onto Furlough?
- Employees with a short term illness or in self-isolation should not be considered for Furlough.
- Employees who are off sick when work is available for them to do ie they are not already Furloughed, should receive at least Statutory Sick Pay (SSp) and / or any relevant Company Sick Pay if there is a scheme in place, in line with company sickness absence processes.
- If your employee is on sick leave or self-isolating due to COVID-19, they are entitled to receive Statutory Sick Pay (and / or Company Sick Pay if provided), subject to meeting the eligibility criteria of the relevant scheme(s).
- Employees who become ill while on Furlough can be moved onto Statutory and / or Company Sick Pay (although this complicates the Furlough claim). NOTE: leaving ill employees on the Furlough payment scheme could cause issues and disputes with other staff who are sick but who are only receiving Sick Pay. So proceed with caution and obtain advice.
- If an employee is already Furloughed but is subsequently advised to stay at home by the government or a medical professional due to COVID-19, they should do so and may remain on Furlough or be taken off the scheme and put onto Statutory / Company Sick Pay (although this complicates the Furlough claim). NOTE: leaving ill employees on the Furlough payment scheme could cause issues and disputes with other staff who are sick but who are only receiving Sick Pay. So proceed with caution and obtain advice.
- If a non-furloughed employee becomes ill, needs to self-isolate or be shielded, then the business may qualify for the SSP rebate scheme, enabling up to two weeks of SSP to be claimed per employee. For further details please visit: Claim back Statutory Sick Pay paid to employees due to coronavirus (COVID-19)
- If a furloughed employee becomes sick and is moved onto SSP, employers can no longer claim for the Furloughed salary. Employers are required to pay SSP themselves, although may qualify for a rebate for up to 2 weeks of SSP Claim back Statutory Sick Pay paid to employees due to coronavirus (COVID-19)
SHIELDING EMPLOYEES, CARERS AND THOSE ON LONG TERM SICKNESS – Can Furlough payments be made to employees who are Shielding, have COVID-19 related caring responsibility issues or are on long term sickness absence?
- Employees who are shielding, who live with someone who is shielding or are on long term sickness absence can be placed onto Furlough at the discretion of the employer.
- Employees who have childcare or other caring responsibility issues due to COVID-19 can be placed on Furlough at the discretion of the employer.
- In all cases it is important for the employer to discuss the situation with the employee to understand their individual circumstances and see if there are any alternatives to Furlough that are mutually beneficial eg can they work from home, can they take holiday or some unpaid leave, can they work different hours / days, what do they think is the best way to help etc
- Any agreements reached are at the discretion of the business in line with business needs.
HOLIDAYS – How do holiday work for Furloughed employees?
- While on Furlough, an employee’s holiday accrues at their normal rates.
- Employees can take holiday while on Furlough. Any holiday will need to be paid at 100% of their normal rate of pay meaning that their 80% Furlough payment will need to be topped up by the company by a further 20%.
- You can tell employees when to take their holidays, as long as you give double the amount of notice for the amount of holiday to be taken ie if you need your staff to take a weeks’ holiday, you need to give them 2 weeks notice.
- Employers also have the right to insist that employees cancel their holiday eg if there are not enough staff available to complete the required work.
- To help avoid a backlog of holiday leave when things start to return to normal:
- Encourage employees to still take any holiday that they had already booked.
- Ask staff to take some of their holiday eg maybe 50% of their annual holiday by the end of June, or similar depending on when the holiday year runs from.
TRAINING – What training can employees complete while on Furlough?
- Employees can complete any training while on Furlough as long as it does not involve providing any services or generating any revenue for the business.
- When Furloughed employees complete training at the request of their employer, they should be paid at least the appropriate National Minimum Wage.
- Encourage staff to complete training while on Furlough to help them prepare for their eventual return to work. Think about any short term skills requirements that the individual might have, as well as longer term career aims.
- When your staff complete training, don’t just leave them to work alone, skipping through a course as quickly as they can. Make it a more meaningful exercise:
- Break the session up where possible into some time training on screen and some of it off screen.
- Join people up with others doing the same courses and after completing a specific section, hold discussions to find out how it went, what they have learned etc
- Agree objectives for how the training will be applied when they return to work.
OTHER WORK WHILE ON FURLOUGH – Can my staff work for someone else while Furloughed?
- Employees can work for another company while on Furlough, as long as it is not for a linked or associated business and there are no restrictions around being able to work elsewhere in their contract.
- A Furloughed employee can also take part in volunteer work.
- If undertaking other work, the employee must not provide services or generate revenue for the company that has Furloughed them, or any linked or associated businesses.
RE-EMPLOYING EX-EMPLOYEES – Do I have to take an ex-employee back on and Furlough them if asked to do so?
- Businesses do not have to agree to Furlough ex-employees.
- If you do decide to take someone back on, in addition to the 80% Furlough payments, bear in mind that the ex-employee will also be entitled to receive all previous contractual benefits such as holiday accrual, holiday pay etc.
- If you made employees redundant or they stopped working for you on or after 28 February 2020, you can re-employ them and place them on Furlough, even if you do not re-employ them until after 19 March 2020. This applies as long as the employee was on your PAYE payroll as at 28 February 2020, which means an RTI submission notifying payment in respect of that employee to HMRC must have been made on or before 28 February 2020.
- If you made employees redundant, or they stopped working for you on or after 19 March 2020, you can re-employ them, put them on Furlough and claim for their wages through the scheme from the date on which you Furloughed them. This applies as long as the employee was employed on 19 March 2020 and was on your PAYE payroll on or before 19 March 2020. This means an RTI submission notifying payment in respect of that employee to HMRC must have been made on or before 19 March 2020.
NEW STARTERS – Can I delay the start date for people I have offered a job to?
- If a start date has been confirmed to a new employee, you cannot postpone this without their agreement to do so.
- If you do not foresee a longer term need for the employee given the current circumstances, you can terminate their contract before they start, paying their notice pay along with any other relevant payments that they are entitled to, as detailed in their contract.
- Alternatively, the new starter is able contact their previous employer to see if they would be happy to reinstate them and place them on Furlough. But the ex-employer does not have to agree to do this.
- If the ex-employer does not agree to Furlough your new starter, then you will either need to pay them at the rates agreed from their start date, gain agreement to delay their start, put them onto Furlough or terminate their contract paying the required amount of notice pay etc.
REDUNDANCY – Can I use the Furlough grant to cover someone’s redundancy payment?
- No – The Furlough grant cannot be used to make a redundancy payment to an employee, although can be used to contribute towards their Notice Pay.
- NOTE: If making someone redundant, all existing UK redundancy procedures, consultation processes, notice periods etc must be applied.