“Furlough” is a word which is very common at the moment. What does it actually mean?
It basically means “leave of absence”. Employees are being furloughed due to the COVIOD-19 outbreak. 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 £2500 per month.
The scheme is open to all UK employees which were operating a PAYE payroll scheme on or before 26 February 2020.
To be eligible, while on furlough, employees must not undertake work for the employer which includes providing services or generating revenue. 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 employees 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. 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.