3rd Apr 2020 in Business
With businesses across the United Kingdom and beyond facing turmoil as a result of the Covid-19 pandemic there is much talk about the word ‘furlough’.
Julie Leonard of the Cathedral Quarter based Edward & Co Solicitors explains just what it actually means.
“It basically means “leave of absence”. Employees are being furloughed due to the COVID-19 outbreak,” she said. “As a result financial support for furloughed workers will be provided to employers through the ‘Coronavirus Job Retention Scheme’.
“Because of the COVID-19 outbreak the Government has confirmed it will subsidise earnings of furloughed employees up to 80% of their pay to a maximum of £2,500 per month.”
The scheme is open to all UK employees who were on a PAYE payroll scheme on or before 28 February 2020.
To be eligible, while on furlough, employees must not undertake work for the employer which includes providing services or generating revenue.
Julie said that the rules are clear: “An employee cannot insist on being furloughed but at the same time the employer should get the consent of employees, otherwise they could leave themselves open to a breach of contract claim.
“However, in practical terms, it is to the employee’s advantage to be furloughed, as the alternative could be redundancy.”
Most employment contracts are included in the Scheme, for example, full time, part time, employees in flexible variable hours or zero rate contracts. Agency workers are also included if on a PAYE payroll.
“Employers are querying whether or not they can partially furlough employees,” said Julie.
“The answer is No. Furloughed employees should not be working during the furlough period.
“However, it is possible to move employees in and out of furlough on a three-week basis where needs arise.
“Furloughed employees can undertake voluntary work or training during the furlough period providing it does not give rise to revenue for the employer.
“Often in employment situations, discussion between employer and employee helps alleviate the anxiety and helps provide clarity especially in these unprecedented times we all find ourselves in.”
In addition to the advice above Destination CQ has provided a guide for businesses here: https://www.cathedralquarterbelfast.com/destination-cq/covid-19