Furlough and Lay-offs

Furlough and Lay-offs FAQs regarding Coronavirus (COVID-19)

FURLOUGH AND LAY-OFFS

First and foremost, you need to be clear about what your employer is telling you. For example, redundancy, furloughing, short-term working and layoffs are all very different  

Short-term working is where employers provide an employee with less work, hours and pay for a period of time. They remain an employee but are required to work less than their standard hours. 

A layoff is when a worker remains an employee but is not given any work and is therefore not paid.  This can only happen if there is a "layoff" clause in your contract. Fortunately, there aren't many of these in the education sector.   

Layoffs and short-term working should only be used as temporary measures and you should call Voice for advice on 01332 372337 if you are being instructed of such measures. You should also call our membership line on 01332 378008 to update your details and make sure you are paying the correct subscription fee.  

If you have been laid-off or placed on short-time working, you are entitled to a Statutory Guarantee Payment. At the time of writing, this is set at £29 a day for up to 5 days in any 3 month period (giving a maximum of £145).  If you work part-time or earn less than £29 a day, this amount will be reduced proportionally. Your employer may have their own Guarantee Pay scheme, but this cannot be less than the Statutory Guarantee Payment.  If you get your employer’s payments, you do not get statutory lay-off pay on top of this. 

If you’re earning less than half your normal pay and you've been laid off or put on short-time working for either 4 or more weeks in a row or a total of 6 weeks in any 13-week period please contact us for further advice as you can argue you've actually been made redundant. 

If I am asked to accept reduced hours and pay, what should I do? 

In some situations, an employer might need to close their business for a short time or ask staff to reduce their contracted hours.  If the employer thinks they'll need to do this, they should talk with staff as early as possible and continue to do so throughout the closure.  

Make sure you have asked if your employer has explored other alternatives and if it’s for financial reasons that they are implementing reduced hours. (For example, the furlough scheme or other government funds) 

The Job Retention Scheme is there to support employees if the employer is closed and not able to provide you with work.  This can provide you with some of your salary and is known as being furloughed.  

If the employer needs to press ahead and reduce hours, then make sure they are in writing and that it stipulates it will be temporary. This prevents employers invoking redundancy on the temporary hours.  

If your hours are reduced by more than 50% then employees can ask for redundancy on original hours so employers may not reduce hours below 50% for this reason.  

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. When a guarantee payment is not payable, you might be able to claim Jobseekers Allowance from Jobcentre Plus. 

Find out more about lay-offs and short-time working (ACAS). 

During this unprecedented time, it is vital you have our support and services available to you. If you have had your hours either increased, or reduced, then call our membership line on 01332 378008. 

Furloughed Workers

The government introduced the Job Retention Scheme (JRS) to pay up to 80% of the wages of private sector employees who are unable to work due to the pandemic, up to a maximum of £2,500 per month.    

On 29 May, further major changes to the ‘furlough’ scheme were announced. In effect there will be two schemes - the 'mark I' scheme will run until 30 June 2020 and the 'mark II' scheme - or 'flexible furlough' - will begin which will introduce more flexibility to help employees back into work and under which employers will be asked to contribute towards the cost of their furloughed employee's salaries to replace part of the contribution currently made by the Government. 

Employees on furlough will not be able to undertake any work for or on behalf of the employer organisation. This includes any planning or other home-based work for your employer. 

Who can be furloughed? 

The government has now confirmed that the Job Retention Scheme will support any individuals who are engaged through the PAYE system, regardless of their employment contract. This means workers who are paid through PAYE will be covered, including those on zero-hour contracts or other flexible contracts.  

To enable the introduction of part-time furloughing, from July onwards you will only be able to receive support through the Job Retention Scheme if you have already been furloughed.  However, armed force reservists and employees returning from maternity, adoption, paternity, shared parental or parental bereavement leave will still be eligible for the furlough scheme even if they have not previously been furloughed by 10 June, as long as your employer has used the furlough scheme for other eligible employees by that date. 

Employers can also furlough those who are temporarily unable to work because: 

  • they're 'shielding' (told to stay at home by the NHS because of an underlying health condition) 
  • someone in their household is shielding 
  • they have childcare responsibilities 
  • they're caring for a vulnerable person in their household 

What wages are covered by Job Retention Scheme? 

The government will pay employers accessing the JRS a grant of 80% of furloughed employees usual monthly wage costs (up to a cap of £2,500).  They will also cover the Employer National Insurance Contributions and minimum automatic enrolment employer pension contributions payable.  10 June is the last date from which employers can furlough staff for the first time.  Further guidance will be issued on how to calculate this. 

  • Your employer can choose to top up your salary, above the 80% / £2,500 cap, but it is not obliged to do so under the JRS. 
  • Fees, commission and bonuses should not be included in the calculation of wages. 

You will continue to pay income tax and National Insurance Contributions as usual on any payments received as part of the JRS (via PAYE deductions made by their employer). Plus, any automatic enrolment contributions on qualifying earnings, unless you have opted out. 

Your employer will also need to pay Employer National Insurance Contributions, but they will be able to apply for a grant to cover this. 

But the furlough scheme is changing. Employers will be able to implement ‘flexible furlough’ from 1 July, including part-time arrangements, and the minimum furlough period (currently three consecutive weeks) will no longer apply – flexible furlough agreements can last for any period. It is a legal requirement that both employer and employee reach agreement on these arrangements and they must be agreed in writing.  Your employer will be required to keep this written agreement when implementing flexible furlough until at least 30 June 2025, and you will have to be paid in full for hours worked.   

From 1 August: 

  • employers will have to pay employer NI contributions and employer pension contributions, with the Job Retention Scheme (CJRS) continuing to pay 80% of wages up to a cap of £2,500.  

From 1 September: 

  • employers will have to pay employer NI contributions and employer pension contributions; and 
  • employers will also have to pay at least 10% of wages, with the CJRS paying 70% (capped at £2,187.50). 

From 1 October: 

  • employers will have to pay employer NI contributions and employer pension contributions; and  
  • employers will have to pay at least 20% of wages, with the CJRS paying 60% (capped at £1,875).  

The furlough scheme will close on 31 October 2020. 

What Holiday am I entitled to if I am furloughed?

The government’s guidance on the Job Retention Scheme says that “employees that have been furloughed have the same rights as they did previously”. HMRC has now provided (some) clarity on this by updating the Employees' Guidance to state that it is possible to take annual leave while on furlough, with the employer having to 'top up' to 100% of normal pay. 

It does not say whether you can be required to use your annual leave while on furlough,  and it does say that “the policy on holiday pay during furlough remains under review." 

Redundancy

Employees can be made redundant during furlough and they can serve their notice during furlough.  

Notice pay should be paid at 100% of their pre-furlough pay if the notice period is based on the statutory notice period i.e. 1 week for every full year of service however, if the notice is at least one week more than the statutory notice period they then only receive their contractual pay, this will depend on what was paid during furlough.  In the case of furloughed employees, their contract was varied when they agreed to furlough so their notice would be based on 80% – 100% of their pre-furlough wage if their notice is at least one week more than the statutory minimum.   

Example:

Kate has worked for her employer for 2½ years. Her contract says she is entitled to receive one month’s notice. She has agreed to accept 80% of normal pay while on furlough. Because she has worked for 2½ years, her statutory minimum notice period is two weeks. Her contractual notice period, one month, is at least one week more than the statutory minimum. Accordingly, s87(4) (ERA) results in her not being entitled to statutory minimum notice rights, and her notice entitlement while on furlough is one month at her current contractual entitlement, i.e. 80% of normal salary. 

The furlough scheme did not change any employment rights so redundancy law and procedures including redundancy warnings and consultation continue to apply.  There must be individual consultation.  There is no right to a face to face consultation meeting and zoom meetings etc. can be used with the employee’s agreement in cases where there are restrictions due to the coronavirus.  Nonetheless, the consultation must be meaningful and a decision to dismiss should only be reached after the consultation has finished, notice should not be served until redundancy consultation is complete. 

A failure to consult can only be reasonable if consultation would have been ‘futile’, the best example of this is if there is a cessation of work in a short time frame for example a nursery has closed is due to close quickly and unexpectedly.   

There is no minimum period for individual consultation but in general there should be at least 2 consultation meetings. 

Lay-off would not affect redundancy pay.  For lay -off this payment is calculated using reckonable service, lay-off periods cannot be included as reckonable service for calculation redundancy.  

If lay off has occurred within 3 years of the redundancy it is not included as reckonable pay for calculating redundancy payments.  All redundancy rules and procedures apply as above in respect of consultation etc. for employees laid off. 

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