Furlough Leave

The Government has announced the Coronavirus Job Retention Scheme which will allow employers to access support to continue to pay 80% of employees’ wages rather than make redundancies due to Coronavirus. There is still a lack of clarity around furlough leave as it is not something that has previously existed in employment law. Furlough is a new term and existing contracts of employment will not refer to it. However, our initial thoughts are employers will need to agree with affected employees that they are “furloughed”. The alternatives will either be redundancy or lay-off (if the contract permits this).

The Government confirmed that the scheme would be open in respect of employees furloughed from 1 March 2020. This must mean that employers will be able to redesignate those already laid off as furloughed; however, as with most of the unanswered questions in relation to the scheme, further details are awaited.

Employers can claim grants of up to 80% of an employee’s wage for all employment costs, up to a cap of £2,500 per month. To qualify for this scheme, employees should not undertake any work while they are furloughed. Employees will remain employed while furloughed. You can choose to fund the 20% difference of the employee’s salary, but this is not mandatory.

Current government guidance for employers is here

Guidance for employees is here

This alert does not provide a full statement of the law and readers are advised to take legal advice before taking any action based on the information contained herein.

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