Coronavirus Job Retention Scheme

Following the Chancellor’s announcement on about the Coronavirus Job Retention Scheme, employers are keen to find out how to access the support.  At this point very little details are available but here’s what know so far?

Can all employers access support?

The scheme covers all employers, whether a sole trader, partnership, Ltd Company or LLP if they have employees who otherwise would have been laid off during this crisis.  The employee must be sent home and classed as on furlough leave; the measures outlined will be available for backdating to 1st March.

Can an employer insist on putting someone on Furlough?

Yes, if the employer has a clause in the contract which allows for the employer to either introduce lay off, or short time working.

If the employer has no lay off clause in the contract, consent will be needed.  However, if an employee refuses to consent to be sent home on Furlough, then they risk being made redundant.  If employees refuse to provide consent the employer could make the employee redundant, provided they have selected fairly.

How do you select for Furlough?

We advise that you use a shortened version of a redundancy selection. Objective criteria such as productivity records, previous appraisals, or a skills matrix.

The reason for this is that if an employee refuses Furlough, the employer could then select them for redundancy and the basis would already be on a fair footing.

Does the employer have to top up the 80% wage to 100% for a furloughed employee?

The employer may choose to top u the wages but this is not compulsory.

However, there is a future risk of a claim for deduction of wages, we think it is small, and the chance of the employer losing such a claim also small, but to avoid the risk, the employer should attempt to get written consent from an employee to the terms of the Furlough. We suspect it won’t be hard given the alternative will be redundancy.

If an employee refuses Furlough can we make them redundant.

Yes, but you need to follow a fair process.

What will be the process for getting the money back?

The government are still in the process of setting up a portal, however it has not gone live yet.

  1.   Select your employee for Furlough
  2.   Gain written consent to 80% pay
  3.   Send the employee home
  4.   Register for the Furlough Pay using the online registration portal (when it goes live)

Are there other limits?

Furlough pay will be 80% of normal wages

There will be a cap of £2500 per month, which is the figure being paid to the employee, not the normal wage.

The cap will include pension and NI contributions.

What if you have further questions or need support?

Call one of the team at Highfield HR on 01656 336097