Employee Advice - Coronavirus
In these difficult times many businesses will be looking to do all they can to protect their cashflow and liquidity so that they can remain trading for long enough to continue once we all beat the virus.
If those businesses have employees, one measure that they can employ is reducing their wage overheads.
Amongst the support measures announced by the Government for employers affected by the coronavirus (COVID-19) pandemic is the Coronavirus Job Retention Scheme.
By taking advantage of the scheme employers can put employees on “Furlough Leave” and then reclaim from the Government up to 80% of wage costs up to a cap of £2,500 per month and the associated employer NICs and minimum auto-enrolment pension contributions on that wage.
An Employer can choose to top up a Furloughed employee’s salary to 100%, but there is no legal requirement for them to do so.
If you are concerned that your employer may be looking to put you on Furlough Leave, or if your employer has told you this will be happening, there are criteria for the scheme and specific procedures your employer should be following.
In order to qualify for the Coronavirus Job Retention Scheme, your employer will need to designate affected employees to be temporarily laid off as ‘furloughed workers’ and notify those employees of this change. As such, if you have been chosen to be put on furlough leave, you should have received a Furlough Leave Letter to explain your employer’s plan to furlough staff in response to the pandemic and pay them through the Coronavirus Job Retention Scheme.
It is very important to note that changing the status of employees remains subject to existing employment law and placing an employee on furlough leave is a variation to the employee’s contract of employment. In practical terms, this means that, unless you have a short-term working/lay-off clause in your employment contract (which many employment contracts do not), your employer cannot just tell you that you are furloughed. Your employer must have consulted with you on this, given you the opportunity to discuss and negotiate and then entered into a written Furlough Leave Agreement with you to validly change your existing terms of employment.
We can assist you with review and advice on any Furlough Leave letter and/or Furlough Leave Agreement you have received so you can be sure your employer is taking the correct steps and notifying, consulting and agreeing changes with you correctly.
If there is no existing short-term working/lay-off clause in your employment contract but your employer has attempted to put you on furlough without consultation, negotiation or a Furlough Leave Agreement, you will likely have a valid claim against your employer for breaches of your employment contract.
It is important to note that you don’t necessarily have to have a formal written employment contract for your employer to have breached your employment terms, as those terms can be implied and still be equally valid and still offer you protection.
If your employer only intends to designate certain workers as being furloughed, while others are to remain working for the business, it is very important that your employer has gone through a valid selection exercise with identifiable, fair selection criteria and analysis to ensure the decision on who is to be Furloughed was reasonable and is clearly recorded. If your employer did not undertake such a selection exercise and just picked you (and any others) without clear and fair reasoning, you may be able to challenge your employer’s decision; especially where being picked for furlough leave will significantly harm your financial position.
We can advise you in relation to all of the above to ensure your employer has acted correctly, fairly and within the law when putting you on Furlough. If they have not, we can assist you with any challenges and claims that may be open to you to.
We all find ourselves in uncharted territory with the current crisis and employers could easily, either deliberately or negligently, put you and your family in serious financial difficulty by misusing or misinterpreting the Coronavirus Job Retention Scheme. We are here to help ensure this doesn’t happen to you.
We appreciate that you may not think you have available funds for legal advice and assistance if you need to tighten your belt. However, engaging us to assist at this early stage could make sure you are not put in avoidable and unnecessary dire financial straits when you are most vulnerable.
For advice and assistance with any and all aspects of the Coronavirus Job Retention Scheme, please contact one of our expert solicitors: