Coronavirus: Job Retention Scheme

As full details of the scheme are awaited, it would be unwise for employers to seek an employee's agreement to "furlough" them before the Government has published guidance and draft legislation on the scheme.
 
However, it is important for employers to communicate with worried employees and the reassurance of an initial letter is a good starting point.
 
On 20 March 2020, the Government announced the Coronavirus Job Retention Scheme to provide funds to support all employers with a PAYE scheme to continue paying employees who would otherwise be made redundant or put on an unpaid period of lay-off.
 
Under the scheme, if a worker is designated as a "furloughed worker", a grant will be available from HM Customs and Revenue (HMRC) to reimburse the employer for 80% of a worker's wage costs, up to a maximum of £2,500 per month. Payments can be backdated to 1 March 2020.
 
The Scheme is initially set to run until the end of May 2020, but the Government has said that the scheme will be extended if necessary.
 
The Government's guidance on support for businesses states that employers that wish to designate employees as "furlough workers" must "notify them of this change" and the change in status "may be subject to negotiation".
 
Unless the employer has a contractual right to lay off workers, it will need the employee's agreement to be placed on furlough leave. Similarly, the employee's agreement is needed to make a reduction in pay. However, it is highly likely that employees will agree, if the only alternatives are redundancy or unpaid leave.
 
During the furlough period, employees will:

• continue to be employed;
  
• not carry out any work; and
• continue to receive salary, although reduced by 20%, unless the employer decides to top this up.

Terms and conditions of employment and continuity of employment will not be affected during this period.