The coronavirus outbreak has put the UK economy under immense strain, with businesses across the country shutting down to prevent the spread.
After discussions with trade unions, the government is to plough billions of pounds into a furlough scheme that will see the taxpayer give businesses 80 per cent of the wages of those employees who are temporarily laid off.
This should stop those business suffering a drop-off from making workers permanently redundant. It will ensure that more workers have enough money to cover their bills and leave businesses well-placed to ramp up activity once demand picks up again.
But while measures to protect jobs are welcome, it’s important that employers follow the rules when sending staff on furlough.
And if you’re one of the workers who’ve been asked to go on furlough, make sure you know your rights.
Despite the government having recently published guidance on how the scheme will operate, there are still a number of unanswered questions about the scheme. But this is what we know right now:
Bosses must follow the rules
Bosses can’t just stick workers on furlough or shorter hours.
An employee is regarded to have been laid off during a particular week if the employer does not have sufficient work for the employee and the employee is not paid as a result. (s.147(1) of the Employment Rights Act 1996).
What does your contract say?
If your contract contains the right for the employer to impose a lay-off, they can simply do so.
But it needs to be for a reasonable period of time, not indefinite.
Collective agreements between employers and unions will normally include provision for minimum payments if employees are laid off for a period.
If it’s not in the contract, then the employer needs your written, informed consent. And they have to make it clear how long the lay-off will be.
The lay-off has to be kept under review and the employer must seek further consent if it lasts longer than expected.
What happens if this isn’t in your contract and you say “no”?
If an employee or their union objects to the lay-offs, the employer cannot simply impose it.
If workers say “no” and the employer attempts to press ahead, employees can resign and claim unfair constructive dismissal, and possibly also claim a statutory redundancy payment.
Or they can continue in employment but claim any shortfall in pay under the unauthorised deduction of wages laws.
This is especially helpful if you haven’t got the two years’ service needed to claim unfair constructive dismissal.
How much will I get paid?
The government will stump up 80 per cent of the wage costs of those laid off. It will also cover employer costs such as their National Insurance and pension payments at the minimum legal level.
It will only cover basic salary and not commission payments and is capped at £2.500 a month. This means that, as it stands, those who currently receive piece work “bonuses” would see their income fall substantially.
Employers can, and we believe should where they can afford it, top up wages to 100 per cent.
If your pay varies, your employer can claim for the higher of either the same month’s earnings from the previous year or average monthly earnings from the 2019-20 tax year.
Who does it cover?
Employees who are paid via Pay as You Earn payroll, which is likely to include a number of agency workers as well as those working via zero hours arrangements. They must have been on the organisation’s payroll as of 28 February 2020.
The scheme also covers employees who were made redundant since 28 February 2020, if they are rehired by their employer.
But, as it currently stands, those workers who have gone onto short-time working will not be covered by the scheme. Those workers will not have their wages topped up to normal levels.
What about the self-employed?
The self-employed (or at least most of them) are covered by a separate Self Employed Income Support Scheme.
How do employers decide who goes on furlough?
Employers must use a fair process for selecting employees for furlough and be very clear about why they are making certain decisions.
They must be careful not to discriminate against particular groups of workers who are protected by equality law, either directly or indirectly.
For example, they must not choose to furlough a worker because their race or because they are pregnant, to do so would be direct discrimination.
Similarly, they should not ask disabled workers to agree to a temporary lay-off to avoid putting in place reasonable adjustments that would allow them to continue working during the current outbreak.
Examples of indirect discrimination would be selecting workers for furlough because of their caring commitments, a group of workers in which women are overrepresented.
I have two jobs. If I am furloughed from one, what happens to the other?
Each furlough arrangement applies to a single job you do. So you can continue working in one job while furloughed from another. The pay cap applies to each employer individually.
Can my employer give me work to do during furlough?
No. A furloughed employee can take part in volunteer work or training, as long as it does not provide services to or generate revenue for their employer.
But if you are asked to do training you must be paid at least the minimum wage/National Living Wage, even if this is more than the 80 per cent of wage that will be subsidised by the government.
This content is provided as general background information and should not be taken as legal advice or financial advice for your particular situation. Make sure to get individual advice on your case from your union or an independent advisor before taking any action.
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