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Your furlough questions answered as we enter lockdown 3



As we enter our third lockdown we anticipate that many businesses will start 2021 with a need to place all or some staff on furlough leave. Employment Partner Sean McDonough answers some of the most frequently asked questions on the current coronavirus job retention scheme (CJRS), which has been extended until 30 April 2021 in his latest article.

Who is eligible to claim CJRS?

The CJRS is open to new entrants and so an employer does not have to have claimed under the CJRS previously, and an employee need not have previously been furloughed to be eligible to claim.

Any UK organisation with employees, can apply provided they have created and started a PAYE payroll scheme, are enrolled for PAYE online and have a UK bank account.

To be eligible to be placed on furlough leave, the employee must have been on an employer’s PAYE payroll by 23:59 on 30 October 2020 (a real time information (RTI) submission notifying payment for that employee to HMRC must have been made  between 20 March 2020 and 30 October 2020).

Employees on the payroll on 23 September 2020 who have since been made redundant can be re-employed and put onto the furlough scheme. This applies as long as the employee was employed on 23 September 2020 and the employer made a PAYE RTI submission to HMRC between 20 March 2020 and 30 October 2020.

Can a furloughed employee work?

No, while it is permissible to work part-time and be furloughed part-time, the CJRS guidance makes it clear that the CJRS grant cannot be claimed in respect of any hour in which the employee is working.

However, during any non-working hours for which the CJRS grant is claimed, a furloughed employee can:

  • Take part in volunteer work for another organisation, as long as they do not provide services to, or generate revenue for or on behalf of, their employer
  • Be encouraged to undertake training (eg to complete online training courses relevant to their work) while they are furloughed.
  • Find work for another employer, if the contract permits this or you allow it.
  • Undertake duties and activities, as a trade union or non-union employee representative, for the purpose of individual or collective representation of employees/workers (eg in a collective redundancy consultation exercise).

Can a furloughed employee work part time?

Yes, the extended furlough leave scheme permits part-time working. The government will fund a maximum of 80% of pay for any non-worked hours, subject to a £2,500 pcm cap. The employer must pay for the employer’s national insurance contributions (NICs) and minimum automatic enrolment employer pension contributions on any furloughed hours. Employees working part of their usual hours will be paid by their employer for those worked hours in the usual way with the government funding the pay of any usual non-worked hours up to the 80% cap.

Can employers furlough staff who are shielding or who have caring responsibilities?

The government has advised that those employees who have been identified as clinically and extremely vulnerable should work from home and if this is not possible, they should not attend work.

CJRS guidance confirms that employees can be placed on furloughed because they are:

  • unable to work because they are clinically extremely vulnerable, or at the highest risk of severe illness from coronavirus and following public health guidance; or
  • because they have caring responsibilities resulting from coronavirus, including employees that need to look after children, or caring for a vulnerable individual in their household.

An employer does not need to be facing a wider reduction in demand, or be closed, to be eligible to claim for these employees.

Can employers furlough staff that are off sick?

No, you should not use the CJRS simply because an employee is unwell. The CJRS is not intended to deal with short-term sick absences or employees who are self-isolating. Non-furloughed staff that become ill should be dealt with under your usual sickness procedures and their entitlement to sick pay will depend on their contract, earnings and reason for their illness.

What will HMRC require to provide evidence for furloughed staff?

To be eligible for the furlough leave grant, employers should write to their employee confirming that they have been furloughed and keep a record of this communication for five years.

Can employers force employees to accept a period of furlough leave?

Placing an employee on furlough leave will involve a temporary change of contract. Employers should make sure any process followed is fair and involves consultation with employees; furlough leave should not be unilaterally imposed without consent.

In these extreme circumstances, employees (and any trade unions) are likely to agree to a period of furlough leave, because the alternative is likely redundancies.

How long can employees be furloughed for?

Seven days is the minimum length of any CJRS claim period to be eligible for HMRC reimbursement. Currently the furlough leave scheme has been extended to 30 April 2021.

How should employers select which employees to furlough and which to carry on working?

The starting point is to consider business needs – which roles are critical to the business functioning during the next few months? Care must be taken to avoid direct or indirect discrimination in the selection process and, if you must select between staff doing identical business critical roles, you may wish to consider asking for volunteers to work, having a selection matrix or using a method of randomised selection.

Employers can also choose to furlough those who are:

  • unable to work because they are clinically extremely vulnerable, or at the highest risk of severe illness from coronavirus and following public health guidance; or
  • because they have caring responsibilities resulting from coronavirus, including employees that need to look after children, or caring for a vulnerable individual in their household.

Do employers have to top up the pay of a worker on furlough leave to 100%?

It is the employer’s choice whether to top up pay to 100%; it is not compulsory, but care should be taken to ensure selective top-ups are not discriminatory. Specific advice should be sought.

Will an employee on furlough leave accrue annual leave?

Yes, furloughed employees continue to accrue leave as per their employment contract. Employees can take annual leave during furlough leave, but the employer must top up their wage during any leave and meet the cost of doing so.

Can an employee on furlough leave be asked to take their annual leave during furlough leave?

Yes, it is possible for an employer to require an employee to take some of their annual leave at a time chosen by the employer (including during a period of furlough leave).

The starting point is to check the employment contract for any contractual provisions that may allow the employer to designate a specific period of annual leave (such provisions are very common).

In the absence of such express provisions, an employer requiring an employee to take leave at specified times must give notice equivalent to at least twice the period of leave to be taken. For example, the employer must give two days’ notice to take one day’s leave, or two weeks’ notice to take one week’s leave.

Can an employee unable to take holiday due to coronavirus carry over their annual leave?

Employees who have not been able to take all their holiday entitlement during the current year may be entitled to carry it over to the following year.

New regulations are now in force, which allow a worker to carry over up to four weeks of their annual leave into the next two leave years, if it was not reasonably practicable for them to take that leave because of the effects of coronavirus (including on the worker, the employer or the wider economy or society) for example if:

  • they are self-isolating or are too unwell to take their remaining holiday before the end of the holiday year; or
  • they have had to continue working and could not take their holiday entitlement.

Employers may also agree with their employees to carry over their annual leave into the next holiday year.

Can employers give notice of dismissal while employees remain on furlough leave?

Yes, an employee on furlough leave has no additional protection from dismissal. However, an employer cannot make a CJRS claim in respect of any day upon which their employee is serving notice of termination  after1 December 2020.. In practice, this means that the costs associated with any period of notice falling after 1 December 2020 must be fully funded by the employer.

If you have any concerns or need clarification that what you plan to do is correct speak to Sean McDonough on 01225 750000 or email sean.mcdonough@mogersdrewett.com.

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