What is a ‘furloughed worker’?

The term ‘furloughed worker’ is not a familiar term used in relation to employment law within the UK. However, the government’s announcement about new support measures in relation to the coronavirus outbreak has changed this, as everyone now wants to understand what a ‘furloughed worker’ is and what the implications will be.
‘Furloughed workers’ are common in the United States, and the term ‘furlough’ relates to the temporary leave of an employee/employees due to the special needs of a company or employer, attributable to the economic conditions at a specific employer, or in the economy as a whole.

The Chancellor, Rishi Sunak, announced that if employers cannot cover staff costs due to COVID-19, they may have the option of accessing support to continue paying a portion of employee wages, in order to avoid the difficult situation of having to make redundancies. Support would be available through the Coronavirus Job Retention Scheme. It is important to note that these payments are available where there would have otherwise been a redundancy situation.

In order to access the scheme, employers will need to discuss the need to reassess impacted employees as ‘furloughed workers’, and to have discussions with those affected. For employers, changing the status of an employee remains subject to existing employment law and contract dependant may be subject to negotiation. Employers will then be required to submit information relating to furloughed employees and their earnings to HMRC via a new online portal. This has not been set up yet but will be available in due course.

Employees should not complete any work for their employers throughout the time in which they are furloughed. This will enable employers to claim a grant of up to 80% of their wages for employee employment costs, up to a cap of £2,500 per month. Workers are still classed as being employed for the period in which they are furloughed, and employers could opt to fund the differences between the payment from the government and their salary, but there is no mandatory requirement for them to do so. Therefore, if employee pay is reduced as a result of these changes, they may be eligible for support through the welfare system, inclusive of Universal Credit.

The Coronavirus Job Retention Scheme is expected to run for a period of at least three months, from 1 March 2020, but it will be extended if necessary.

Source CIPP 24-03-2020


Coronavirus: Chancellor prepares wage package rescue plan

Chancellor Rishi Sunak is to announce an employment and wage subsidy package to try to protect millions of jobs.

Talks went on into the night with business groups and union leaders, who urged the government to help pay wages amid the coronavirus pandemic.

Many firms are warning of collapse, wiping out thousands of jobs, as life in the UK is largely put on hold.

The chancellor’s wage package, due to be unveiled later on Friday, is the latest in a string of big fiscal attempts to ease the burden on businesses and their employees.

Prime Minister Boris Johnson has urged struggling businesses to “stick by their employees, because we’re all going to need them”.

One proposal under discussion is for the UK to follow the lead of countries such as Denmark, where the government has promised to cover 75% of salaries at private companies for three months, if they promise not to let staff go.

Businesses will be “watching carefully to see what government support comes in” today, says Dame Carolyn Fairbairn, director general of the Confederation of British Industry.

“Many other countries have now done this – France, Germany, Spain, Italy have put employee wage support in place and if that comes through quickly I believe there are businesses who will take a different decision because they want to keep their people and they want their businesses to be viable for when we recover,” she told the BBC.

Source BBC 20th March 2020


List of ‘key workers’ published

It has been announced what professions fall under “key workers” and whose children will still be attending schools following there shutdown after the spread of COVID-19.

The Department for Education published the list of “key workers” on the 19/03/20. They are:

Frontline health and social care staff
Teaching staff, nursery staff and social workers
People working in vital public services such as justice system, death registry workers, journalists in public service broadcasting
Government workers in local or national administrations
Food production and processing workers including sales and delivery staff
Transport workers
Utilities workers
Postal workers, key telecommunications staff and bank workers

The Department for Education said:

“If your work is critical to the Covid-19 response, or you work in one of the critical sectors listed below, and you cannot keep your child safe at home then your children will be prioritised for education provision.”

If a pupil’s legal guardians are a carer or a single parent, then the child is still allowed to attend school as well.

Source HRreview 20-03-2020


If an employee needs time off work to look after someone

Employees are entitled to time off work to help someone who depends on them (a ‘dependant’) in an unexpected event or emergency. This could apply to situations to do with coronavirus.

A dependant does not necessarily live with the person, for example they could be an elderly neighbour or relative who relies on the person for help.

There’s no statutory right to pay for this time off, but some employers might offer pay depending on the contract or workplace policy.
The amount of time off an employee takes to look after someone must be reasonable for the situation. For example, they might take 2 days off to start with, and if more time is needed, they can book holiday.

If a dependant such as a partner, child or relative in the same household gets coronavirus symptoms, they should receive Statutory Sick Pay (SSP) as a minimum for this time. 

School closures

As schools in England, Scotland and Wales will be closing, this will have an affect on care and working arrangements. This may be an anxious time for parents, and employers will need to be planning cover at work. 

If employees need emergency time off for child care or to make new arrangements, they can use:

  • time off to care for someone else
  • holiday, if their employer agrees

Employers and employees can consider these steps:

  • talking to each other early on about time off that might be needed 
  • agreeing regular conversations so both can plan ahead
  • agreeing flexible working instead of taking longer periods of time off, for example working from home or changing working hours to allow for child care

If any agreement is made, it’s a good idea for it to be in writing.

Source ACAS March 2020


Coronavirus: Lay-offs and short-time working

In some situations, an employer might need to close down their business for a short time, or ask staff to reduce their contracted hours.

If the employer thinks they’ll need to do this, it’s important to talk with staff as early as possible and throughout the closure.

Unless it says in the contract or is agreed otherwise, they still need to pay their employees for this time.

Employees who are laid off and are not entitled to their usual pay might be entitled to a ‘statutory guarantee payment’ of up to £29 a day from their employer.

This is limited to a maximum of 5 days in any period of 3 months. On days when a guarantee payment is not payable, employees might be able to claim Jobseekers Allowance from Jobcentre Plus.

Using holiday

Employers have the right to tell employees and workers when to take holiday if they need to. For example, they can decide to shut for a week and everyone has to use their holiday entitlement.

If the employer does decide to do this, they must tell staff at least twice as many days before as the amount of days they need people to take.

For example, if they want to close for 5 days, they should tell everyone at least 10 days before.

This could affect holiday staff have already booked or planned. So employers should:

  • explain clearly why they need to close
  • try and resolve anyone’s worries about how it will affect their holiday entitlement or plans

Source ACAS March 2020