Furlough, Job Retention Scheme (JRS) and redundancy

In some cases, where work has ceased because of the coronavirus lockdown, your employer might ask if you want to be furloughed. Information on what that means for you can be found below.

What if my employer is considering layoffs or redundancies?

As a result of the coronavirus crisis, many workplaces were closed and employees asked to work from home if they could. However, some jobs cannot be done from home and some employers have therefore considered lay-offs and redundancies. The UK government announced details of the Coronavirus Job Retention Scheme that has now been extended until the end of April 2021.

Employers can use this scheme to retain their staff until they can reopen for business, rather than make staff redundant. They can ‘furlough’ employees and apply for a grant that covers part of their monthly wage costs. Since 1 July 2020, employers can require employees to return part-time but must pay normal wages for days worked.

What is a furloughed/ flexible furloughed worker?

To access the Job Retention Scheme, employers need to designate affected employees as ‘furloughed workers,’ and notify their employees of this change.

Furloughed workers are unable to work because workplace operations have been affected by coronavirus.

if you are furloughed, this will change the status of your employment relationship – your contract. This change in employment status remains subject to existing employment law and, depending on your employment contract, may be subject to negotiation. This change should be temporary.

Can I work while on furlough?

Employers can furlough employees full-time or flexibly and ask you to work part-time for any amount of time and any shift pattern.

You cannot undertake work for your employer during time which you are recorded as being on furlough.

What pay can I earn as a Flexible Furloughed worker?

  • Since 1 July 2020, employers can require employees to return part-time as a Flexible Furlough worker but must pay normal wages for days worked. The employer can continue to claim for 80% wages on days not worked up to the cap of £2,500 per month.
  • From 1 August 2020, employers will be required to pay employer NICs and pension contributions on furlough pay.
  • From 1 September 2020, employers will be required to pay 10% of furlough pay and can apply to recover the remainder up to £2,187.50 per month.
  • From 1 October 2020, employers will be required to pay 20% of furlough pay and can apply to recover the remainder up to £1,875 per month.
  • From 1 November, employers will no longer be required to contribute to furlough pay, other than employer NICs and pension contributions, and can claim for 80% wages on days not worked up to the cap of £2,500 per month.  The percentage may be reviewed for February and March.

Who decides whether someone is furloughed / flexible furloughed?

An employer decides who is to be furloughed / flexible furloughed. In choosing staff to be furloughed / flexible furloughed, employers will have to consider discrimination laws and the implied duty of ‘mutual trust and confidence’. Employers are likely to seek volunteers.

As this will require a variation of an employee’s contract, an employee’s written consent is required before they go on furlough / flexible furlough.

Who can be furloughed/ flexible furloughed?

Full details are yet to come from the government, but employees and workers can now be furloughed/ flexible furloughed on the extended scheme if they were on PAYE at 30 October 2020.

The extended scheme applies to employees on an organisation’s payroll at 30 October that are any of the following:

  • full-time employees,
  • part-time employees,
  • employees on agency contracts
  • employees on flexible or zero-hour contracts.
  • employees who were made redundant since 23 September 2020, if they are rehired by their employer.

What if I have caring responsibilities?

Employees who are unable to work because they have caring responsibilities resulting from coronavirus can be furloughed / flexible furloughed. For example, employees that need to look after children.

Employers must consider and avoid potential unlawful discrimination under the Equality Act 2010 (EqA 2010), such as indirect sex discrimination for mothers with sole parental responsibility for school-age children or associative direct disability discrimination for those who live with someone disabled. For example, employees that need to look after children.

What if I am shielding for health reasons?

The UK government is advising people defined as clinically extremely vulnerable, who were previously shielding, to work from home. If you cannot work from home, you are advised not to go to work.  You may be eligible for Statutory Sick Pay (SSP) or Employment Support Allowance (ESA).

In Scotland, if you are on the shielding list you should continue to work from home if you can.  If you cannot work from home, you can return to a workplace if it’s safe for you to do so, and following guidelines for the protection level in your area.

Similarly in Wales,  if you are defined on medical grounds as extremely vulnerable from coronavirus advised to work from home, where you can. If you cannot work from home, you should be able to review any risk assessment with your employer to ensure all COVID safety measures are being observed in the work environment.

In Northern Ireland, if it is possible for you to work from home, you should continue to do this. However, if your employer has taken the proper measures to ensure social distancing in your place of work, and you can travel to work in a way which allows for social distancing, you can continue to work.

If an employee is not on sick pay and cannot work from home , they may be eligible for furlough pay.

Speak to your UNISON branch if you think your employer is not treating you fairly.

What pay will I receive?

Full-time or part-time employees will be paid 80% of their actual salary, up to a maximum of £2,500 per month.  As before, it is unlikely that the wages covered will include fees, commission and bonuses.

As from 1 August 2020, employers will be required to pay employer NICs and pension contributions on furlough pay.

What if my pay varies month to month?

Full details are yet to come from the government but, for employees whose pay varies, the 80% will be based on 80% of the average monthly earnings in the period from the start date of their employment or 6 April 2020 (whichever is later) up until the day before they are due to be furloughed.

Can my employer pay me below the National Minimum Wage if I am ‘furloughed/ flexible furloughed’?

The government has stated employees on the National Minimum Wage (NMW) can be paid less than this usual legal minimum. They say that the NMW does not apply to furloughed/flexible furloughed employees. However, if employees are required to engage in training activity, such as completion of an online training courses, whilst they are furloughed/ flexible furloughed, they must be paid at least the NMW for the time spent training.

Will my furlough/flexible furlough wages be subject to income tax and deductions?

Yes

Will my employer still make National Insurance and minimum automatic enrolment pension contributions?

Employers remain liable for associated Employer National Insurance contributions and minimum automatic enrolment employer pension contributions on behalf of furloughed employees and can claim for these costs from the government in addition to the wage.

Employers cannot claim for reimbursement of these costs from 1 August 2020.

Can I request annual leave when on furlough/flexible furlough?

The government produced guidance about holiday entitlement and payments on 13 May 2020.  It is expected that this will continue to apply during the extended Job Retention Scheme.

There are some points which remain open for interpretation about how existing legal rights are affected. If you read the guidance and still have a query then please discuss with your UNISON branch who will be able to advise you.

What if I have more than one job?

Employees with more than one job can be furloughed/flexible furloughed for each job. Each job is separate, and the cap applies to each employer individually.

Can I do volunteer work/training if I am furloughed/ flexible furloughed?

Yes, so long as the volunteer work/training does not provide services to or generate revenue for, or your employer.

If you complete online training courses while you are furloughed, you must be paid at least the full National Living Wage (NLW)/National Minimum Wage (NMW) for the time spent training, even if this is more than the 80% of your wage that will be subsidised.

Will a company in administration be able to access the JRS?

Yes.

Further details on government guidance on this issue can be found here 

If you have been notified by your employer but are unclear then you should contact your UNISON Branch for advice.

UNISON has COVID-19 legal briefings on furlough, annual leave, sickness and redundancies and details of impacts of returning to work.

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