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Following the initial announcement by the Chancellor on 20 March (and please see our article released shortly after that here), introducing the concept of Furlough Leave and furloughed workers, there has been a huge take up from businesses across the UK.

Those employers who were quick to furlough some or all of their staff were acting on the initial Government guidance that was rather vague to the say the least. Late last week the Government published more detailed guidance on Furlough Leave and the eligibility and criteria for businesses to consider when accessing the Coronavirus Job Retention Scheme (CJRS):

• All UK businesses are eligible, including charities, recruitment agencies (where agency workers are paid through PAYE) and public authorities;
• Employers will need to designate affected employees as ‘furloughed workers’ and comply with employment law obligations in doing so;
• Employers will need to submit information to HMRC about furloughed employees through a new online portal (that has yet to open, but is expected to open by the end of April);
• The scheme will run (backdated) from 1 March 2020 until the end of May, but may be extended if necessary;
• HMRC will reimburse by way of a grant 80% of the furloughed employees’ wage costs, up to a cap of £2,500 per month plus employers’ NI contributions and certain pension costs;
• The employee must have been on the employer’s PAYE payroll scheme as at 28 February 2020;
• The scheme applies to full-time employees, part-time employees, employees on agency contracts and employees on flexible or zero-hours contracts;
• The scheme also covers employees who were made redundant or laid off since 28 February if they are re-hired by the employer;
• To be eligible for the HMRC grant, the employee can not undertake any work during the furlough leave period (the scheme does therefore not apply to those working shorter hours or shorter days or simply doing less work due to home-working or a downturn in capacity);
• The furlough leave periods must be for a minimum of 3 weeks at a time;
• To be eligible for the HMRC grant, the employers are required to write to the employees to place them on furlough leave, and if reducing their salary will need to comply with employment law obligations in doing so;

The Government also provided further guidance on how to go about calculating employees’ pay for the purposes of Furlough Leave. This set out that within the calculations, commission and bonus payments should not be included. If the employee earns varying amounts per week/month, such as those on zero hours contracts, then the employer should claim the higher of pay based on the employee’s pay for the corresponding month from the previous year or the employee’s average monthly earnings from the 2019/20 tax year.

As further information becomes available the picture becomes clearer to some extent but also raises more questions and queries that have not been addressed as yet. The CJRS is ground-breaking as far as the UK Government and employment law in this country are concerned but throughout the key focus is on saving jobs and on saving businesses in the current global climate. However, to avoid issues with being able to reclaim the HMRC grants and also avoiding employment law issues and claims in the future (particularly as and when businesses return to ‘normal’), employers need to tread carefully, take legal advice and put in place all of the appropriate documentation.

We have been helping many clients in relation to Furlough Leave and the employment law implications and should your business need help and assistance, our team of expert employment lawyers can help guide you through the minefield of documentation and detail of the CJRS. If you need assistance then please get in contact with our Employment Team by email or by calling 01603 610911.