We are now a week into being able to claim funds for furloughing employees. Now that the system has settled down here are some comments on the questions that you are asking:
“If I am made redundant or dismissed, will my notice pay be based on my furlough pay?”
Answer: Conventional opinion is that notice pay is based on the salary at the time of dismissal, therefore it may be at 80%. In turn the employer would be able to claim 80% of that notice pay. However, notice pay, and especially the relationship between contractual and statutory notice, is notoriously illogical and each case will have to be considered on its facts.
“Does there have to be a written agreement between the employer and employee for furlough payments to be made?”
Answer: This became a bone of contention with HMRC having a number of attempts to get this right. Halfway through this process HMRC said there was a requirement for employees to agree to cease all work in writing. This was cleared up by HMRC saying: ‘the employer and the employee must reach an agreement and an auditable written record of this agreement must be retained’. However, in practice it appears that HMRC are being pragmatic in most circumstances.
“Can the employee be furloughed against their will?”
Answer: No. there has to be an agreement. ACAS have a good example https://www.acas.org.uk/furlough-letter-template
“If there is no ‘variation’ clause in the contract, can employers only pay the 80%?”
Answer: This goes to the agreement issue again. There has to be a consensus to furlough staff and to pay them at 80%.
“I’m being asked to carry out some work while being furloughed. Is this okay?”
Answer: this is a very common question. The rule is that the employer should not provide any work, nor should the employee ask for it. The Government rule clarifies this by saying the employee must not ‘make money for the employer’. This may mean that supplying figures for a VAT return is okay but supplying figures for the company to collect furlough payments (i.e. making money) is not! The bottom line is that no work should be undertaken.
“Can the employer ask their staff to train whilst being furloughed?”
Answer: Yes. This is a good opportunity for staff to increase knowledge and skills. Perhaps getting staff to watch on-line training videos will keep them motivated and in touch. However, if minimum wage employees are being furloughed at 80%, then they should receive the full NMW for training time.
“Can employees take on another job whilst furloughed?”
Answer: Yes, as long as the contract of employment allows for this or doesn’t forbid it. Therefore, an employee could receive their furlough pay and then pick fruit or work for Tescos.
“Can the employee take holiday or be made to take holiday during furlough?”
Answer: The question here is why would the employee want to take holiday when they do not have to work? But technically, the contractual holiday provisions still apply. In turn, the employer could enforce any contractual holiday provisions, for example the Whitsun closedown. However, full contractual pay would be due during this period. In addition, an employer could make employees take holiday by giving notice of twice the amount of the holiday to be taken.
“What happens if staff are required to go back to work during a three week period of furlough?”
Answer: Then the employer will not be able to claim the 80% of salary for those employees.
“What happens to the maternity pay of staff just about to go on maternity leave?”
Answer: Normally, pregnant women will be paid 90% of salary for the first six weeks followed by 33 weeks of SMP. It is the 90% that may be affected. However, this is based on ‘normal’ pay and this is calculated by certain reference periods which differ for monthly and weekly/hourly paid staff. Hopefully, this will mean that full, pre furlough, pay will be used, but as the furlough period lengthens this may become an issue. Specific advice will need to be taken here.
“If an employee is made redundant after furlough will the previous salary or the furloughed figure be used?”
Answer: Consensus in the legal world is that it will be the contractual figure, although there is not much logic when compared to notice pay (above). This will need specific advice on a case by case basis.
“Will overtime be taken into account for furlough pay?”
Answer: If the overtime is contractual, then ‘yes’. If it is not, but it is habitual, then possibly ‘yes’. Anything else will be on a case by case basis.
“How does the employer make a claim?”
These answers are general and do not constitute legal advice. Should specific advice be required then I would be happy to take you on as a client. Ian Pearson – email@example.com