The Prime Minister’s update on Friday 20th March 2020 provided an alternative option for businesses to consider by way of avoiding Redundancy. We are expecting the Prime Minister in the next few days to legislate specifically on this alternative option of Furloughed Workers, or at least provide clarification as to the rules and procedures.
The language used in the government update, from a legal employment law perspective is potentially contradictory so we need to have the full details before we can advise specifically on that option.
We appreciate this is frustrating not only for you as a business owner but also for us too, as we would all like clear answers to the ongoing announcements as soon as possible, however we will advise as best we can at present based on our interpretation of what information we have and want to assure you that we are doing all we can to help you and your business survive these difficult times.
What does seem to be clear from the announcement is that employees do need to remain ‘employed’ and therefore employees already ‘dismissal by way of redundancy’ may not result in the employer qualifying for monies from the Coronavirus Job Retention Scheme for those employees who have already been dismissed.
Below is an extract from GOV.UK in relation to the Furloughed Workers from an employee perspective.
If your employer cannot cover staff costs due to COVID-19, they may be able to access support to continue paying part of your wage, to avoid redundancies.
If your employer intends to access the Coronavirus Job Retention Scheme, they will discuss with you becoming classified as a furloughed worker. This would mean that you are kept on your employer’s payroll, rather than being laid off.
To qualify for this scheme, you should not undertake work for them while you are furloughed. This will allow your 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. You will remain employed while furloughed. Your employer could choose to fund the differences between this payment and your salary but does not have to.
If your salary is reduced as a result of these changes, you may be eligible for support through the welfare system, including Universal Credit.
We intend for the Coronavirus Job Retention Scheme to run for at least 3 months from 1 March 2020 but will extend if necessary. Further information can be obtained via the following link here;
Information on COVID-19 pandemic is also available via Public Health England, The Foreign and Commonwealth Office, GOV.UK and NHS 111.
If your business is considering Lay Off or Redundancy, you may prefer to wait a day or two to see if the Prime Minister updates us all on Furloughed Workers as we think this could potentially help you as the employer try to protect your employees futures, and that of your business.
Your lead employment law consultant can provide a temporary letter based on our interpretation of the scheme, where appropriate, in order to support you with Furloughed Workers until such time we get clarification from the Government.
Please take care and stay safe.