Please see below for the latest Coronavirus related Employment Law updates. If you have any questions or concerns please call us on 01603 496623 and we’ll do our best to get you a free 15 minutes advice appointment with a solicitor.
Please note that this is a rapidly changing area at the moment and we will publish updates when we can.
The Government’s Coronavirus Job Retention Scheme – Advice for Employees
This note summarises what we currently know about the Coronavirus Job Retention Scheme (CJRS). It is based on the guidance note issued by HMRC which can be found at https://www.gov.uk/guidance/check-if-you-could-be-covered-by-the-coronavirus-job-retention-scheme.
You can also find information on the ACAS website. Be aware that if you search for ACAS you may see a link to an organisation which is not in fact ACAS and which may seek to charge you for advice. The official link is https://www.acas.org.uk/coronavirus.
Given the speed with which the government has had to act, it is inevitable that the guidance does not cover every situation. Further clarification may follow and the position may change as the CJRS evolves.
As with all legal issues, we will need to discuss your specific circumstances, in particular the terms of your contract of employment. Our specialist employment lawyers can give telephone advice.
What is the purpose of the CJRS?
The CJRS is designed to support employers whose business has been severely affected by coronavirus (COVID-19). It will give them financial support so that they can pay their employees.
Who does the CJRS cover and what exactly is it?
The scheme allows employers to put employees on what is termed “furlough” and then claim the wage costs back from the government.
Furlough means that you are not required to go to work, or indeed do any work for your employer.
You will be covered by the scheme if you were on your employer’s payroll after 28 February 2020 and you are either a full-time employee, a part-time employee or an employee on a flexible, zero-hour or temporary contract. If you are an agency worker and are on the PAYE payroll scheme of an agency you are likely to be covered as well.
If you have been made redundant since 28 February 2020 your employer could take you back and then furlough you, but it does not have to do so.
Your employer does not have to use the CJRS. It could decide to proceed with a redundancy process instead, or it could start a redundancy process after you have been furloughed, even if the CJRS is still in force. If you are in that situation you should seek legal advice.
Which employees should employers furlough?
If your employer’s business closes completely, it is likely that all employees will be furloughed. If, however, it remains open but is not as busy, it will only need to furlough some employees. In those circumstances it will have to select employees for furlough. It may ask for volunteers. Your employer must avoid discriminating against particular employees or groups of employees when deciding who should be furloughed.
If you are doing some work for your employer but are working fewer hours than normal, you cannot be furloughed.
If you are off sick or self-isolating you should be paid company sick pay or SSP until you are fit to return to work. Your employer can decide to furlough you at that point.
If you are shielding in line with public health guidance you can be furloughed.
If you are pregnant or on maternity leave and you think your rights may be affected you should take legal advice.
Employees do not have a right to furlough; it is up to your employer to decide whether to furlough employees and, if so, which employees the scheme should apply to. You can ask your employer to furlough you and it is a good idea to explain the reasons for your request to and to ask your employer why your request has been rejected if that is the outcome.
What happens to employees on furlough?
Employees on furlough must not do any work for their employer.
While on furlough you can do volunteer work for someone else, as long as what you do does not provide services to, or generate income for, your employer. You will also need to ensure that what you are doing does not breach the terms of your contract of employment.
In some circumstances you may be able to get a job elsewhere while on furlough, but again this may depend on the terms of your contract of employment. It is advisable to check this with your employer.
You may be required to do training while on furlough, in which case your employer must ensure that you are paid the national minimum wage / national living wage for that training, even if you have agreed to accept a drop in pay while furloughed.
While you are on furlough you will continue to accrue holiday. All your employment rights continue during the furlough period and on your return to work.
How long does furlough last?
The CJRS is backdated to 1 March 2020 so your employer should be able to claim wage costs for employees who have been furloughed on or after that date.
A period of furlough must last for at least three weeks. Your employer may “rotate” furlough between employees or furlough you and then require you to return to work, either temporarily or permanently, to meet changing demand, subject to the three-week provision.
The CJRS will run initially until 31 May 2020. The government may extend it, depending on the circumstances at the time. When the CJRS ends, your employer may need to consider making employees redundant.
What can my employer claim from the government?
The government will pay your employer a grant to cover 80% of your monthly wages (up to a maximum of £2,500). Wages do not include fees, commission or bonuses. On top of that it will cover employer national insurance contributions and the minimum automatic enrolment pension contributions. Your employer will deduct tax, employee national insurance contributions, pension contributions and any other usual deductions in the normal way when paying you.
If you have one year’s service or more, “wages” for the purposes of the CJRS will be the amount you earned in the same month last year or your average monthly earnings in the past year, whichever is higher.
If you have less than one year’s service, your average wages will be used for the calculation. The same applies if you are on a zero-hour contract.
What happens about the shortfall in wages?
The CJRS only covers 80% of wages.
If you earn more than £3,125 per month before deductions you will receive a lower percentage of your total wages.
Unless your contract of employment allows your employer to reduce your pay, it will either have to pay the shortfall in wages or reach an agreement with you whereby you agree to accept only what the employer can claim under the CJRS. You may want to take legal advice on this.
If your employer has had to close completely or has experienced a drastic drop-off in work, it may not be in a position to pay you until it is paid by the government.
In either of the above situations you should think carefully about whether to agree to the change. If you do so, you may help your employer to stay in business, which means that hopefully you will have a job to return to. If you do not agree, your employer may decide to make you redundant or terminate your employment and offer you a new contract on different terms. You may want to take legal advice before making a decision.
How and when your employer can claim
The government are setting up a portal through which employers will have to submit their claims. It is expected that this will be up and running by the end of April. It is not clear how soon after that employers will start receiving the grants. Your employer will hopefully update you on the situation as soon as it can.
Help for the Self-Employed?
There have been calls for the government to provide assistance to other workers in the same way as it will support employees through its new furlough leave scheme.
Although not yet agreed, an amendment has been proposed to the Coronavirus Bill to provide freelancers and self-employed people with “statutory self-employment pay”.
If the measure comes into force, the government will “top up” the earnings of these workers so that they receive 80% of their net monthly earnings (averaged over the last three years), up to a maximum of £2,917 per month.
We will provide an update as soon as there is any firm news.
Acas gives employees and employers free, impartial advice on workplace rights, rules and best practice. To access there website go to www.acas.org.uk.