Furlough leave – Our employment law specialist explains all you need to know

9th Apr 2020
Lisa Boyle

Furlough leave – Our employment law specialist explains all you need to know

 

Furlough is a word that did not exist in most people’s vocabulary until a few weeks ago. However, in the unprecedented times that we live in as the coronavirus crisis rages on, the Government has put in place special measures to protect employees and businesses.

The furlough scheme allows employers to temporarily lay off staff as a short term measure. Furlough is not a dismissal that brings employment to an end and it is not redundancy, which would also bring employment to an end.

Staff who are not key workers have been told to work from home, where possible. However, not everybody’s job allows them to work from home and where an employee cannot work from home, they should be placed on furlough leave.

 

 

Will my job return to normal once I finish furlough leave?

 

Priya Cunningham, our employment law specialist, explains: “This is a temporary measure which allows the employee to return to their normal job once the employer is either allowed to trade again after the lockdown, or once the employer’s business requires the member of staff to continue their normal duties.

“The Government will pay 80 per cent of salary, or up to £2,500 for each employee on furlough leave. The employer can chose to pay a contribution of up to the additional 20 per cent, however there is not legal requirement for them to do so. The objective of furlough is to protect an employee’s job and their income during a time when the majority of businesses cannot trade normally.

“Employers can claim 80 per cent of compulsory, contractual commission from HMRC for sales commission up to the date of furlough. During the furlough period only 80 per cent of basic pay can be claimed by employers from the Government.

“The 80 per cent of salary does not include non monetary benefits such as the value of a car or health insurance. An employee cannot claim for any expense incurred with using their company vehicle during the furlough period.”

 

How many times can I be furloughed?

 

Staff can be furloughed multiple times and it is possible to furlough a member of staff and then bring them back into the business and furlough them again, during any period where is a downturn in work.

There will be staff who won’t be happy that they have been placed on furlough leave. However, the only alternative to furlough would be dismissal and the whole point of the furlough scheme is to avoid dismissal and protect employees’ incomes.

If an employee is dismissed instead of furloughed then they might be able to pursue an unfair dismissal claim if they have 2 years or more service. The current situation is not one that that could have been predicted and most employees won’t have anything in their contract about temporary leave, but again, as much a furloughed employees might not be happy to take a drop in income furlough does ensure that they still have a job.

It would be open to an employee who has been employed for more than 2 years to resign in response to being furloughed and claim constructive dismissal and seek a redundancy payment. However, in reality such a claim would be risky and difficult to win at the Employment Tribunal.

If you have any questions about furlough please contact Priya Cunningham, employment law specialist by email [email protected]