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Employment Law Advice: COVID-19 Job Retention Scheme

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The government has announced it will reimburse employers with 80% of wage costs for “furloughed workers”, capped at £2500 per month. Though we await full details and further clarification is needed, here are some points to consider from an employment law perspective:

  • You cannot force a member of staff to be a “furloughed worker” as you could face claims for breach of contract, unlawful deduction of wages and/or constructive unfair dismissal.
  • Employment law and the terms of the employment contract still apply and you need to ensure this status is negotiated with the employees, making it clear that without an agreement redundancy is likely.
  • If you only need some of your employees to be furloughed workers then you need a fair and objective process in place to decide who should be asked to agree to this status otherwise you may face a claim for discrimination.
  • Workers will need to be identified by you as “furloughed workers”, as opposed to either redundant or laid off. This will need to be notified to the employee and confirmed in writing.
  • At the end of furloughed status the employee returns to work on the usual terms and conditions of employment.
  • Submit information to HMRC about the employees that have been furloughed and their earnings through the new online portal. The COVID-19: support for businesses guidance states that HMRC will set out further details on the information required.
  • Ensure that the employees do not carry out any further work while they are furloughed.
  • The COVID-19: support for businesses guidance states employers will be reimbursed “80% of furloughed workers wage costs, up to a cap of £2,500 per month”. The COVID-19: guidance for employees states that the scheme will allow an “employer to claim a grant of up to 80% of your wage for all employment costs, up to a cap of £2,500 per month”.

For further advice please email Paul McCord