Updated April 14 2020
Most by now most will have heard of ‘Furlough Leave’ and have a broad understanding of why it has been implemented by the Government and its general workings. If not please read our earlier blog which you will find on our website.
It is however important to stress from the outset that lawyers up and down the Country are only able to advise on ‘Guidance’ issued by the Government every now and again. There are no specific regulations, statutory instruments etc which means the whole area of ‘Furlough Leave’ is subject to constant change and revision.
Following further guidance/information from the Government we now know:
- The portal to register those staff which have been ‘furloughed’ will be up and running by 20th April 2020. Until it is no one will know how many staff have been ‘furloughed’ and whether the portal will be able to cope at the time remains to be seen.
- The first claim employers will be able to lodge will be in respect of any employees furloughed from 1st March 2020 to 30th April. Employers will only be able to make a claim once per pay period and will have to re-submit in respect of the next if the employee continues to be furloughed.
- Claims can be made up to 14 days in advance and it is estimated by HMRC that payments will be received into the employer’s bank account 7 working days following successful submission of the claim. So in respect of claims lodged on 20th April 2020 reimbursement should be received by 30th April 2020.
- Following email correspondence sent by HM Treasury it appear that employees who were TUPEd across to a new employer after 28th February 2020 will be eligible to be placed on furlough leave.
- It appears that an employee can take annual leave whilst on furlough leave but s/he must be paid at full pay.
- Employees can start a new job whilst on furlough leave but the employee may be prevented from doing so if there is a restriction in the current employment contract.
- An employer can reclaim 80% of compulsory commission back from HMRC as well as the basic salary. This presumably will have to be calculated by reference to commissions in the past before being placed on furlough leave.
- The 80% does not include non-monetary benefits.
- Company directors can be furloughed and are only permitted to undertake statutory duties which are not set out specifically. Presumably though this covers the filing of accounts with Companies House for example which would not involve any remuneration for the company but rather ensuring compliance with a strict requirement.
- It has been confirmed employees can be furloughed multiple times providing of course each time they are furloughed it is for a minimum period of 3 weeks. This gives an employer an opportunity to furlough staff on a rotating basis, which some may perceive as a fairer system. For some businesses though this may not be a particular efficient use of resources given the time it can take time for employees to adjust once they return from a period off work and impact adversely upon continuity.
- Employee can be switched from sick pay to furlough leave and vice versa. Further employees who are particularly vulnerable and shielding themselves can be furloughed. Obviously no part of the grant can be siphoned off to fund benefits and the whole grant must be paid to the employee.
- Employers must notify employees in writing if they have been furloughed and set out in detail the key terms (for example whether the employer will be making up the 20% shortfall on their wages, when the furlough leave will end, confirm they are unable to undertake any work for the company etc). Our employment lawyers can draft an appropriate furlough leave agreement based upon the current guidance for a fixed fee of £250 plus VAT including an initial consultation over the telephone. It is important to mention that new agreements will need to be sent to the employee concerned each and every time s/he is furloughed should you planning to rotate your employees.
- Employees with limitations on their visas, will not be breaching their visa conditions if they are paid under the furlough scheme.
- When an employer reclaims national insurance contributions and the auto enrolment pension contributions this is calculated by reference to the furlough salary and not the normal salary.
- Employees cannot be furloughed and then work for a company linked to their employer.
Contact our Commercial Law Team on 01795 472291or email firstname.lastname@example.org