Employment Law FAQs

This page covers employment law FAQs to help both employers and employees. We cover various issues such as furlough, workplace testing and directors duties.

Workplace testing

Workplace COVID-19 testing is a subject that is causing much confusion. Here are the most common questions.

My employer thinks I am displaying symptoms for COVID-19, can they discipline me if I refuse to self-isolate or take a test?

Where an employee is displaying symptoms of COVID-19 it is likely to be considered a reasonable management instruction for them to require the employee to be tested. This is on the grounds that the employer will need to comply with its obligations under the Health and Safety Act to ensure the health and safety of its employees as far as reasonably practicable.

If you have complied with your employer’s instruction to self-isolate and take a test, prior to receiving the negative result, then you are likely to have complied with their management instruction and therefore should not face disciplinary action. However, if you initially refused to self-isolate or take a test when displaying any symptoms, there may be scope for them to initiate disciplinary action against you.

Our employer is requesting us to take weekly COVID-19 tests, is this permitted?

As a general principle, where an employee is exhibiting symptoms of COVID-19 it will be easier to argue it was reasonable to require that employee be tested for COVID-19, where the purpose is to protect the health and safety of the workforce. It becomes more difficult to justify testing where employees are not exhibiting symptoms, it will depend on the circumstances of the particular employer and the extent to which the risk of COVID-19 can be managed through other measures.

For example, where employees have to work in close proximity because of the nature of their work, social distancing and other measures are not likely to be possible or feasible therefore a requirement to take a test may be reasonable to pick up cases as early as possible. In contrast, some employers may be able to facilitate remote home-working or implement social distancing in the workplace much more readily, therefore, justifying a requirement to take a test will more difficult to argue as proportionate.

Your employer will have a risk assessment in place to ensure its workplace is COVID-19 secure. As part of this assessment, they are likely to have identified testing its employees as a measure to minimise the risk of transmission and ensure the health and safety of its employees. You can request this assessment from them which should assist in subsequently challenging whether it is proportionate.

Can my employer prevent me from returning to work for additional days even after I have completed my self-isolation period?

An employee is allowed to return to work after completing their period of self-isolation but, again, an employer may be able to justify a longer period of sick leave depending on their risk assessment and the extent to which the risk can be managed through other measures.

Am I legally required to take part in my employers COVID-19 testing programme?

As explained, your employer will have a risk assessment in place to ensure its workplace is COVID-19 secure. As part of this assessment, they are likely to have identified testing its employees as a measure to minimise the risk of transmission and ensure the health and safety of its employees. Employees are entitled to ask to see this and make their own judgment as to whether testing is a proportionate measure.

If an employee does not agree to take a test, they cannot be forced to do so. An employer can argue that circumstances exist that make testing necessary and proportionate, enabling them to consider taking disciplinary action against the employee who is refusing to be tested. This would depend on factors such as the nature of the employee’s work and any evidence on the necessity of testing in the particular environment i.e. the risk assessment. However, this action should be considered with caution by the employer, if there are valid and legitimate reasons why an employee refuses, taking disciplinary action could be a risky strategy. It will largely depend on the particular facts of the scenario and the circumstances of the employee in question.

I have to travel to work to take a test, should my employer pay my travel expenses?

If your employer does not ordinarily subsidise your travel costs to and from work, then it is unlikely that you will be able to claim expenses for your travel to work to take your weekly COVID-19 test if you then go on to work that day/shift. This is likely to come under the general commute to work. However, if you are asked to attend work especially for this, arguably the time you are taking the test is directed time and therefore working time. This should normally be paid.

No, if you have been told that you need to self-isolate either because you have tested positive for Coronavirus, one of your co-habitants has tested positive for Coronavirus or you have been notified by Track and Trace that you must self-isolate, you must not attend the workplace and should stay at home.

If your employer is still asking or encouraging you to attend the workplace they will be in breach of the regulations and liable to a fine starting at £1,000. Employers have a legal obligation to ensure that their employees who have been told to self-isolate do not attend the workplace. For more information on this topic please see our recent blog “Permitting a worker to break their self-isolation: new regulations and what this means for employers“.

The Job Retention Scheme – FAQs for employers

These are the common questions we have had on the furlough scheme from employers.

When has the scheme been extended until?

The Coronavirus Job Retention Scheme (CJRS) has been extended until 30 September 2021 following the budget announcement  on 3 March 2021.

How much are employees entitled to under the scheme?

Under the extended scheme terms, the government have confirmed that they will be contributing 80% towards employees’ usual salaries for hours not worked, up to a maximum of £2,500 per month until the end of June 2021.

From 1 July 2021 this will reduce to 70% of a worker’s wage costs up to a maximum cap of £2,187.50. From 1 August 2021 this will reduce further to 60% of a worker’s wage costs up to a maximum of ££1,875. Employers will be required to top up salary to 80%, contributing 10% in July 2021 and 20% in August 2021.

Does the money have to be paid back?

The Coronavirus Job Retention Scheme entitles employers to claim a grant from HMRC and therefore it does not need to be paid back.

How do you register a furloughed employee?

Employers have to submit certain information to HMRC via an online claim service in order to register a furloughed employee.

What is the difference between being furloughed and laid off?

In both cases the employee will not be undertaking any work for the employer for a period of time, but their employment will be continuing. The main difference is that a furloughed worker continues to be paid during this period. Also:

  • Furlough can go on for a longer period;
  • A furloughed employee does not have the same rights to trigger redundancy as a laid off employee does.

Who is eligible for the scheme?

Employers do not need to have previously claimed for an employee to be eligible to furlough them under the extended scheme.

For periods ending on or before 30 April 2021, employers can claim for employees who were employed on 30 October 2020, as long as they have made a PAYE Real Time Information submission to HMRC between the 20 March 2020 and 30 October 2020, notifying a payment of earnings for that employee.

For periods starting on or after 1 May 2021 employers can claim for employees who were employed on 2 March 2021, as long as they have already made a PAYE Real Time Information submission between 20 March 2020 and 2 March 2021.

Employers can claim for employees on any type of employment contract, including full-time, part-time, agency, flexible or zero-hour contracts. Foreign nationals are eligible to be furloughed. Grants under the scheme are not counted as ‘access to public funds’, and you can furlough employees on all categories of visa.

The scheme is also stated to apply to the following, if they are paid via PAYE: office holders (such as company directors), salaried members of Limited Liability Partnerships (LLPs), agency workers (including those employed under umbrella companies), contingent workers in the public sector, contractors with public sector engagements in scope of IR35 off-payroll working rules (IR35)and limb (b) workers.

Can employees put themselves on furlough?

No, employers need to designate the staff as furloughed.

What if an employer refuses to put employees on furlough?

Employers are not under an obligation to place employees on furlough. The employer should adopt fair and non-discriminatory selection criteria for determining which employees, if any, will go onto furlough. This may involve initially asking for volunteers. This will avoid or any complaints such as potential discrimination claims arising from the process of selection.

Does the extended scheme still allow for flexible furloughing?

Yes, the extended scheme allows employers to flexibly furlough employees. Under the scheme, employees can work for some of the week and be furloughed for the rest, in proportions decided between employee and employer.
To be eligible for flexible furlough, employees must have been on their employer’s payroll on 30 October 2020. Employees do not need to have been furloughed under the furlough scheme previously.
See our blog on flexible furlough.

Can employees work while they are fully furloughed?

Employees will not be able to do any work for their employer (or any associated employer) if they are fully furloughed.

Furloughed employees can however undertake volunteering and training, provided they are not:

  • making money for their employer
  • Providing services to their employer

Under schedule 7 of the Coronavirus Act 2020, employees now have an entitlement to emergency volunteering leave. This is limited only to supporting the NHS and health services “as an emergency volunteer in health or social care”.

An employer would not be able to furlough employees and request that they then volunteer to complete work for them – i.e. you can’t volunteer for your same employer.

Employees on furlough can take a temporary job with a new employer, provided the contract of employment permits this (or the employer agrees by way of a variation).

Employers can also place individuals onto flexible furlough. This means that an employee can work part-time and receive a furlough grant for their unworked hours.

How long can an employee be on furlough leave?

There is no minimum period that an employee needs to be furloughed for. However, employers should be aware that, due to the way in which the claims are structured, claims through the online portal will need to cover at least one week.

Can employees who are sick or self-isolating be furloughed?

The employee guidance confirms that employees who are sick can be furloughed, however it should not usually be used in cases of short-term sickness. The guidance says:

If, however, employers want to furlough employees for business reasons and they are currently off sick, they are eligible to do so, as with other employees. In these cases, the employee should no longer receive sick pay and would be classified as a furloughed employee

What about those who are shielding?

The latest guidance confirms that Employers can furlough employees who are clinically extremely vulnerable or at the highest risk of severe illness from Coronavirus. It is up to employers to decide whether to furlough these employees. An employer does not need to be facing a wider reduction in demand or be closed to be eligible to claim for these employees.

Can employers claim for an employee’s salary whilst working their notice period?

The fifth treasury direction confirms that claims cannot be made in respect of notice between 1 December 2020 and 30 April 2021.

The employer guidance also now states that:

“For claim periods starting on or after 1 December 2020, you cannot claim for any days on or after 1 December 2020 during which the furloughed employee was serving a contractual or statutory notice period for the employer (this includes people serving notice of retirement or resignation)”.

We expect this will be extended to apply the same during the extended furlough scheme from 30 April 2021 until it ends on 30 September 2021.

What about employees who have more than one employer?

An employee can be put on furlough by one employer and continue to work for another, provided this is permitted by their contract of employment.

An employee can also be put on furlough leave by more than one employer. In these circumstances, they will receive separate payments from each employer and the 80% of their normal wage up to the cap of £2,500 a month applies to each job.

What should be included when calculating pay?

When calculating 80% of employee wages for hours not worked, this consists of the regular payments that employers are obliged to make, including:

  • regular wages you paid to employees
  • non-discretionary payments for hours worked, including overtime
  • non-discretionary fees
  • non-discretionary commission payments
  • piece rate payments

Employers cannot include the following when calculating wages:

  • payments made at the discretion of the employer or a client – where the employer or client was under no contractual obligation to pay, including:
  • any tips, including those distributed through troncs
  • discretionary bonuses
  • discretionary commission payments
  • non-cash payments
  • non-monetary benefits like benefits in kind (such as a company car) and benefits received under salary sacrifice schemes (including pension contributions) that reduce an employee’s taxable pay

Do you need consent to put an employee on furlough leave?

There has been some disagreement over whether or not employers need to get consent from employees to place them on furlough leave or not. This arose from conflicting guidance and direction documents from HMRC at the start of the pandemic in March and April.

The legal consensus was that if an employee was being paid 80% of their wages then consent was required but if an employee was being paid 100% of their wages then consent was not required.

The guidance confirms that Employers should discuss with their staff and make any changes to the employment contract by agreement. When employers are making decisions in relation to the process, including deciding who to offer furlough to, equality and discrimination laws will apply in the usual way.

To be eligible for the grant, employers must have confirmed to their employee (or reached collective agreement with a trade union) in writing that they have been furloughed. The guidance directs that employers must:

  • make sure that the agreement is consistent with employment, equality and discrimination laws
  • keep a written record of the agreement for five years
  • keep records of how many hours the employees work and the number of hours they are furloughed.

It confirms that the employee does not have to provide a written response to this written confirmation.

How are the payments calculated?

This depends on whether the employee is being fully furloughed (i.e. is not working at all) or whether they are being flexibly furloughed. It also depends on whether they have fixed wages, or variable pay.

If an employee has fixed wages, and was eligible for furlough under the original scheme, the calculation is based on the wages payable to the employee in their last pay period on or before 19 March 2020. This applies, irrespective of whether the individual was actually placed onto furlough leave.

For all other employees on fixed wages who were on your payroll on 30 October 2020, the employee’s reference period will be their last pay period ending on or before 30 October 2020. These employees will only be eligible for periods starting on or after 1 November 2020.

Employees who were first reported on your payroll between 31 October 2020 and 2 March 2021 can be furloughed from 1 May 2021. Details of how you should calculate these employees’ wages will be provided in updated guidance in due course.

If an employee has variable pay, the calculation of their “usual wages” will depend on whether they were eligible for furlough under the previous scheme. The government has created an online calculator to assist with these calculations.

Can an employer rotate staff on furlough leave?

An employer is able to rotate staff on furlough leave.

Can an employee take holiday whilst on furlough?

Individuals are able to take holiday whilst on furlough.

If individuals do take holiday then the guidance confirms that this should be paid at the normal rate of pay, which can include overtime, bonuses and commission payments provided these are sufficiently regular so as to count as normal remuneration. Employer will therefore need to top-up the employees’ wages during the time they take as holiday.

You can require employees to take holiday during the period of furlough leave, subject to giving proper notice (of twice the period of leave which the individual is being asked to take, so if an employer wants an individual to take 1 week’s leave then 2 weeks’ notice is necessary).

If an individual is flexibly furloughed then any hours taken as holiday during the claim period should be counted as furloughed hours rather than working hours.

If an employee usually works bank holidays then the employer can agree that this is included in the grant payment. If the employee usually takes the bank holiday as leave then the employer would either have to top up their usual holiday pay, or give the employee a day of holiday in lieu.

Can directors do any work whilst furloughed?

Directors can also be furloughed. This also applies to salaried individuals who are directors of their own personal service company (PSC).

When furloughed, directors cannot work for their employer. However they can do tasks to fulfil their statutory duties as a director, but this appears to be a very limited exemption and covers tasks such as complying with filing requirements at Companies House. This exemption for statutory director duties would not allow the director to do work of a kind they would carry out in normal circumstances to generate commercial revenue or provides services to or on behalf of their company.

If an employer uses the scheme could this information be shared publicly?

From February 2021, HMRC will publish the names of companies and LLPs who have made claims starting on or after 1 December 2020. The fourth Treasury Direction has confirmed that this publication will also give a reasonable indication of the amount claimed. An exception may be made to this where employers can show that the publication would expose their workforce to “serious risk of violence and intimidation”.

From February 2021, HMRC will also be sharing with furloughed employees the full details of claims made for them starting on or after 1 December 2020. This will be done via the employee’s Personal Tax Account on Gov.uk.

What will happen to the Job Retention Bonus Incentive?

The Chancellor has confirmed that the Job Retention Bonus will fall away due to the extension of the furlough scheme.

The Job Retention Scheme – FAQs for employees

These are the common questions we have had on the furlough scheme from employees.

My employer has told me it wants to place me on furlough leave, what can I expect to happen next?

As long as you were employed on or before 30 October 2020, and were on the pay roll by that time, your employer can place you on furlough leave.

They must select you in a non-discriminatory way.

Your employer should:

  • confirm the terms of the furlough in writing before the furlough period starts;
  • make it clear to you how much you will be paid during the furlough period.

We would expect your employer to write to you, explaining the terms of the furlough leave period and your pay during that period.

Your employer may want to use flexible furlough with you and should explain these terms to you if it applies.

Whilst on furlough leave, you should be paid a minimum of 80% of your normal wages. This is the amount your employer can claim from HMRC under the CJRS. Your employer can choose whether they top up this payment to 100% of your normal salary. Some companies may be unable to do this.

There had been some disagreement over whether or not employers need to get consent from employees to place them on furlough leave or not. This arose from conflicting guidance and direction documents from HMRC at the start of the pandemic in March and April. The legal consensus was that if an employee was being paid 80% of their wages then consent was required but if an employee was being paid 100% of their wages then consent was not required. Whilst this arguably remains the case, we strongly recommend all companies get consent for certainty and we hope your employer will therefore do that too.

Any furlough agreements should be kept by your employer for 5 years.

The Scheme has recently been extended until 30 September 2021.

Can I place myself on furlough leave?

No. It is up to an employer to choose whether or not they place someone on furlough leave. An individual cannot apply for payment through the government scheme. If you don’t think the company has enough work for you to do or you are having difficulties carrying out your normal work from home you could raise this with your employer and ask them to consider placing you on furlough leave, but you cannot force them to do so.

My employer won’t place me on furlough leave. Do I have the right to be furloughed?

This will largely depend on your situation. There is no automatic right to be placed on furlough but your employer can choose to place you on furlough leave. The options available to your employer will depend on the reason you are unable to work. We’ve summarised some of the general situations below but if you have concerns about your specific situation we would recommend you seek advice.

If you are generally healthy, do not fall into one of the vulnerable categories defined by the government and can either attend work (if your job is such that it is unreasonable to do your job from home) or work from home, then your employer is likely to be entitled to require you to continue to work and can refuse to consider furlough leave.

If you are temporarily unable to work as you have been advised to stay at home by your doctor (i.e. to shield again), you have childcare responsibilities or you are caring for a vulnerable person in your household then you can be placed on furlough leave if your employer chooses to do so.

If you are on short term sick leave or cannot work because you are self-isolating because you have symptoms of Coronavirus or live in the same household as someone with symptoms you should normally be receiving statutory sick pay or company sick pay. Your employer does not have to furlough you in this situation as it is normally covered by the sickness rules. The furlough scheme is not intended for short term absences from work due to sickness. However, if there is a wider business reason to furlough you and your employer anticipates the furlough period lasting longer than your self-isolation period then your employer doesn’t have to wait until your sick leave ends to place you on furlough.

If you are already on long term sickness absence then your employer may be able to end your sick leave and place you on furlough at their discretion.

Whatever your situation, the first step will always be to talk to your employer to see if you can reach a compromise solution you are both happy with.

Can I be placed on furlough leave whilst in self-isolation?

If you are on sick leave or cannot work because you are self-isolating because you have symptoms of Coronavirus or live in the same household as someone with symptoms you should be receiving statutory sick pay or company sick pay.

However, if there is a wider business reason to furlough you and your employer anticipates the furlough period lasting longer than your self-isolation period then your employer doesn’t have to wait until your sick leave ends to place you on furlough. You would stop receiving your statutory sick pay and would be considered a furloughed employee instead.

The latest guidance confirms that employers can furlough employees who are clinically extremely vulnerable or at the highest risk of severe illness from Coronavirus. It is up to employers to decide whether to furlough these employees. An employer does not need to be facing a wider reduction in demand or be closed to be eligible to claim for these employees.

I submitted a grievance and now my employer is placing me on furlough leave. What will happen to my grievance?

Your grievance should continue whilst you are on furlough leave. You can agree with your employer to suspend it but normally it will be better for it to continue. Your employer might ask you to agree to change the process slightly or extend the time frames if people are working from home and it will take longer to complete each stage.

If you are on flexible furlough, grievance processes could certainly continue on days and times that you are working for your employer under those arrangements and you could request that meetings are held on those days.

You can also raise a new grievance whilst on furlough leave by following your employer’s grievance process.

I am in the middle of a disciplinary process. What will happen to this process?

Any disciplinary processes should continue whilst you are on furlough leave. Under the government guidance, an employee is not able to work for their employer whilst on furlough leave. Employees can do voluntary work, and can undertake training, providing that they are not making money for their employer, or providing services to their employer. We do not believe this prevents an employee being asked to attend a disciplinary hearing, and so disciplinary processes should be allowed to continue.

If you are on flexible furlough, disciplinary processes could certainly continue on days and times that you are working for your employer under those arrangements.

Your employer can also start a new disciplinary process if necessary. You will remain bound by your terms and conditions of employment so should ensure you follow them even whilst you are not physically at your workplace or carrying out work for your employer.

Can I volunteer for the NHS or a charity whilst on furlough leave?

Yes. Under schedule 7 of the newly enacted Coronavirus Act 2020 you are entitled to emergency volunteering leave. This is limited to supporting the NHS and health services “as an emergency volunteer in health or social care”.

You can also volunteer for a charity provided the charity is not your normal employer.

My employer placed me on furlough leave and has now told me they are making me redundant. Can they do that?

Unfortunately, being placed on furlough leave doesn’t completely protect you from redundancy. The Government introduced the Scheme to encourage employers to keep employees on the pay roll and protect jobs for once the Covid-19 pandemic is over. However, if a business needs to close all or part of its business or has a reduced need for employees to carry out work of a particular kind which they anticipate will remain the case for the short to long term, they may be able to start a redundancy process with affected staff.

Your employer will still need to follow a fair redundancy process with you. Whether or not making you redundant in the current situation is fair is likely to depend on when your employer makes the decision to make you redundant whether they have considered the furlough scheme as an alternative, the reasons for the redundancy situation and the financial position of your employer.

My employer doesn’t want to put me on furlough leave but has asked me to temporarily vary my contracted hours and accept a lower salary instead. Is this possible?

Yes. If the business still has work to be completed or does not want to use the Scheme it may explore other options with you. This could include shorter hours and lower pay. In the first instance, your employer can’t force this change on you and you would need to agree to it (unless in the case of shorter hours, the employer has the right under your contract to lay you off, or put you on short-time working).

However, if you don’t agree to the change, then depending on their business reasons for asking you to reduce your hours the company may be able to dismiss you and re-engage you on the new proposed terms and conditions. Such situations are very fact dependent and it is worth seeking specific advice on your individual situation.

Your employer might also explore other options including taking accrued but untaken annual leave or periods of unpaid leave.

Do I need to agree to be put on furlough leave or can my employer force it on me?

At the start of the pandemic, there was a conflict between the Direction and the guidance which had been issued but HMRC have now confirmed that consent to furlough will be required if your employer will be reducing your pay during the furlough period, but that consent will not generally be required if your employer is topping up your pay to your normal pay. However, employers are required to provide a furlough agreement and therefore the terms of the furlough leave should be in writing and provided to you.

Where consent is required, and if you don’t initially give your consent, your employer may start a consultation process with you to impose the changes or make redundancies. If more than 20 people will be affected by this the rules on collective consultation may also apply which will affect the length of the consultation process.

My employer has chosen to put some employees on furlough leave but requires some employees to come to work. I’ve been denied furlough leave and this seems unfair. Is there anything I can do?

This situation may seem unfair if colleagues are not required to work but are receiving all or most of their salary whilst you are still working, either from home or at the workplace which carries an increased risk of infection. However, as long as your employer has used appropriate non-discriminatory criteria for selecting those who are granted furlough leave it is possible for them to make this decision. Some employers may only need certain teams to be available or may need a lower number of people in each team to keep the business running smoothly whilst there is a reduction in the work available.

If you are concerned about the decision you could speak to them and ask them to reconsider their decision not to allow you to take furlough leave or ask them to rotate those on furlough leave so that everyone gets a turn.

The work my employer does has stopped due to COVID-19 and the company has suggested it may become insolvent. What is going to happen to my job?

Your employer may face insolvency if it cannot pay its debts. They might explore making you redundant, ask you to keep working until a solution can be found or transfer you to a new employer under TUPE (if the business has been sold).

Depending on your situation, if the company does not have any money to pay you what you are owed you may be able to apply to the government for a redundancy payment, holiday pay, outstanding payments including unpaid wages, overtime and commission and any money you would have earned working your notice period.

You may also be eligible for unemployment benefits if you lose your job. If you do not apply for benefits after you lose your job you might get less money in your statutory notice pay payment.

I already have more than one job. One of my employers is placing me on furlough leave but my other employer still has work for me to do. Is this ok?

Yes. Your employment with each employer is treated separately. You can be furloughed from each job separately or continue to work for one employer whilst being on furlough leave from the other. Each job will be separate and the £2,500 monthly cap and subsequent reduced caps as the scheme tapers off, apply to each one.

I was affected by the school closures and chose to take unpaid leave from my job to care for my children. Can I now be put on furlough leave instead?

Yes.

It is possible, however, that your employer may be reluctant to do this and you cannot force them to put you on furlough leave. They may look to discuss options including taking holiday or unpaid leave instead. If this affects you we would recommend you seek specific advice on your situation.

I am being placed on furlough leave but my financial situation is tight. Can I apply for another job with a different employer whilst on furlough leave to top up my income?

Yes, as long as it doesn’t conflict with your current role.

You remain an employee of your first employer and must follow any specific clauses in your contract of employment concerning alternative employment.

You should also remain willing and able to work during your furlough leave so should not commit yourself to paid employment which you cannot get out of during your normal working hours.

However, if you could potentially do both jobs at the same time if you needed to, this would seem to be ok under the rules of the Scheme. It would be no different to having already had two jobs before this situation started. For example, if you normally work 9am – 5pm you could take on a new role working 7pm – midnight in a supermarket. We would recommend you kept careful records of any new employment you start as HMRC will see you have been receiving income from a different source during your furlough leave and may choose to investigate it.

It is possible that your employer could also consent to you working for another company during your normal working hours but you’d need to be able to end this and return to work as normal when your furlough ends so in practice this might not be possible.

What will I be paid if I am placed on furlough leave?

This will depend on the agreement you reach with your employer. You should receive a minimum of 80% of your “wage” costs under the Scheme, up to a maximum cap of £2,500 per month. This is the amount your employer can claim back from the government. Your employer can choose to top up this amount to your full normal wage, or may agree a different arrangement with you.

“Wage costs” is based on your normal basic salary. Please see the separate questions below covering what is included under the Scheme.

If a particular payment is not covered by the Scheme as a “wage cost” your employer can choose to pay you an amount equivalent to it but is not obliged to. If the payment is a contractual payment and is not purely discretionary then if they decide not to pay it to you whilst you are on furlough leave they would either need to obtain your consent or go through a consultation process with you before they do this as it is a change to your terms and conditions of employment.

I normally work overtime every month to top up my basic salary. Will I still receive this if I am placed on furlough leave?

The position on overtime was previously unclear and the Treasury Direction and guidance appeared to be inconsistent.

It is has now been clarified that if the employee has been paid variable payments due to working overtime, you can include these payments when calculating 80% of their wages as long as the overtime payments were non-discretionary. Payments for overtime worked are non-discretionary if you are contractually obliged to pay the employee at a set and defined rate for the overtime that they have worked.

Therefore, the key point is whether the employer is contractually obliged to pay for overtime worked, rather than whether the overtime itself is compulsory or guaranteed. We suggest employers take specific advice about their situation if they have any questions.

I normally receive an annual bonus payment. Will I still get this payment?

Your employer will not be able to recover bonus payments through the Scheme.

If you have a contractual right to a bonus then your employer should either pay this to you as required or ask you to consent to forgo or delay the payment. If any bonus payment is discretionary your employer is not obliged to pay you a bonus and can choose not to do so without having to ask for your consent.

My basic salary is low but I receive regular commission payments. Will I still get these payments?

Whether or not you receive your commission payments through the Scheme will depend on whether it is compulsory commission or a discretionary payment.

The government has issued updated guidance which confirms that non discretionary commission payments can be claimed back. The guidance then states: “when variable payments are specified in a contract and those payments are always made, then those payments may become non-discretionary. If that is the case, they should be included when calculating 80% of your employees’ wages. It is important to note, however, that you have to have a contractual right to the payment and it will not cover you if your commission was purely discretionary.

My gross monthly salary is above the £2,500 cap set by the government. What will I be paid?

This will depend on your employer. As they can only recover 80% of your wage costs from the government, up to the £2,500 cap, they can decide whether they want to top up your wages to 100% or not. If they do not intend to pay these additional amounts they will need to ask for your consent or go through a consultation process with you as it is a change to your terms and conditions of employment.

If my employer pays me 80% of my normal basic wage I will receive less than national minimum wage based on my normal working hours. Is that ok?

The government guidance confirms that employees on furlough leave do not need to be paid national minimum wage (NMW) with reference to their normal working hours as they are not actually working or training. Therefore, if you are not working, the number of hours you are deemed to have worked for the purposes of calculating the national minimum wage will be zero. However, if you undertake any online training then they must be paid the NMW in respect of those training hours.

Do I have to wait to be paid until my employer has received the money from the government under the Scheme or will I be paid as normal?

No. Your employer should pay you as normal under your contract of employment. They can then claim back the amount they are due from the government under the Scheme to reimburse their costs. The online portal is active and employers can make a claim for your wages and should receive the grants within 6 working days, so there should not be a delay to employees receiving the payments.

I work variable hours each month. What will I be entitled to?

If an employee has variable pay, how you work out their usual wages depends on when they were on your payroll. For employees who were on your payroll on 19 March 2020, you should calculate 80% of the higher of the:

  • wages they earned in the corresponding calendar period in a previous year
  • their average wages payable in the tax year 2019 to 2020.

For all other employees on fixed wages who were on your payroll on 30 October 2020, the employee’s reference period will be their last pay period ending on or before 30 October 2020. These employees will only be eligible for periods starting on or after 1 November 2020.

Employees who were first reported on your payroll between 31 October 2020 and 2 March 2021 can be furloughed from 1 May 2021. Details of how you should calculate these employees’ wages will be provided in updated guidance in due course.

The government has created an online calculator to assist with these calculations.

I am currently on maternity leave, can my employer end my maternity leave and place me on furlough leave?

Your employer can’t force you to end your maternity leave and place you on furlough leave. It is, however, possible to remain on maternity leave and also be placed on furlough leave without it bringing your maternity leave to an end but only if you are getting enhanced maternity pay from your employer.

If you are receiving enhanced company maternity pay, your employer could place you on furlough leave and claim back 80% of your enhanced company maternity pay through the Scheme.

If you are only receiving statutory maternity pay, or have exhausted your enhanced company maternity pay, then your employer cannot put you on furlough leave and pay you 80% of your normal salary without you ending your maternity leave.

If you are thinking about returning to work you could serve notice to end your maternity leave and negotiate with your employer to be placed on furlough leave on your return to receive 80% of your normal salary through the Scheme. However, you would need to be prepared to return to the workplace if the furlough leave was ended. You normally need to give 8 weeks’ notice to return from maternity leave, although your employer could agree to waive this notice period to enable you to return sooner and be placed on furlough leave. Once you have ended your maternity leave you cannot return to it and you will lose any protection given to women on maternity leave so it is important to only make this choice if you are sure you are ready to return to work if required.

The same situation applies to any employees on paternity leave, adoption leave or shared parental leave

Can I claim benefits whilst on furlough leave to replace the missing 20% of my salary?

This will depend on the arrangements you meet with your employer and the salary you receive. It may be possible to apply for some means tested benefits but you should seek specific advice on this. You remain employed by your employer whilst on furlough leave and can’t claim benefits based on unemployment. If you make an application which does not follow the rules HMRC may investigate you for a fraudulent claim.

I am on a zero hours contract, can my company place me on furlough leave?

Yes. There was a lot of confusion over this point as the Government announcements and the guidance gave conflicting information. The updated guidance makes it clear that workers, who are paid through PAYE, can be furloughed and receive support through this Scheme including those on zero-hours contracts.

If you on a zero-hour contract as either an employee or a worker your employer can recover 80% of your wage costs under the Scheme and you can be placed on furlough leave.

However, the status of those working under zero-hour contracts is a contentious area of employment law. If you are affected by it we recommend you seek specific advice on your situation to clarify your entitlements.

I am an agency worker, what are my rights?

If you were introduced to your employer by an agency but you are working under a contract of employment directly between yourself and your employer and your employer pays your wages directly then you may be covered by the Scheme. This will only apply if you are not working for your employer while you are placed on furlough leave.

If you are carrying out work for a company but you are on the pay roll of an agency rather than the company itself then the agency company may be your employer not the company you carry out the work for. In that situation the agency you work for can place you on furlough leave but the company you carry out the work for can’t.

I work for my own personal service company. I pay myself a minimum wage salary as an employee and receive dividends to top up my earnings. Can I include the dividend payments in the “wage costs” I claim through the Scheme?

No. You will be able to claim for 80% of your basic PAYE employee salary (subject to the £2,500 cap) but you will not be able to claim for the dividends you receive.

I am a company director. Can I be furloughed?

Yes, providing you don’t do anything other than take steps to fulfil your statutory obligations.

The updated guidance states that where furloughed directors need to carry out particular duties to fulfil the statutory obligations they owe to their company, they may do so. However, you must do no more than would reasonably be judged necessary for that purpose. For instance, you should not do work you would carry out in normal circumstances to generate commercial revenue or provides services to or on behalf of their company. But you can file accounts with Companies House, respond to legal issues or meet financial commitments.

If you would like guidance on the difference between statutory obligations as a director versus carrying out other activities please contact one of the employment team.

Our employer is saying we must use two weeks annual leave during the time we are on furlough. Can they do this?

Government guidance provides that if an employer requires a worker to take holiday while on furlough, the employer should consider whether any restrictions the worker is under, such as the need to socially distance or self-isolate, would prevent the worker from resting, relaxing and enjoying leisure time, which is the fundamental purpose of holiday. Employers can also cancel a worker’s holiday, provided there is enough notice.

The required notice period an employer has to provide double the length of the holiday if the employer wishes to require a worker to take holiday on particular days or the length of the planned holiday if the employer wishes to cancel a worker’s holiday or require the worker not to take holiday on particular dates.

If you require any further or more detailed advice then feel free to contact any member of the employment team and we can arrange a telephone appointment to go through your particular situation.

Has any legislation been brought in for the Coronavirus outbreak that allows employers to cut employees’ salary?

No, the rules and regulations brought in for the Coronavirus scheme do not give employees the right to cut employee’s pay. The main thing which has been brought in around employees is the furlough scheme, which gives employers the ability to claim back up to 80% of an employee’s pay where the employee has been furloughed (so sent home with no work to do). Employers can, if they choose, top up the employee’s pay to normal (i.e. 100%) pay. However if they don’t top up pay, then employees would need to agree both to go onto furlough leave in the first place, and would also need to agree to reduce their pay to 80%. This is made clear by the government’s guide to the furlough scheme which says “Employers should discuss with their staff and make any changes to the employment contract by agreement.”

Can employees refuse to take a pay cut?

Yes, employees need to agree to take a pay cut. If employees do not agree, and the employer still cuts their pay, then this would be an unlawful deduction of wages and the employee could bring a claim in the Employment Tribunal. They could also resign and claim constructive dismissal, but resigning from their job may not, in the current climate, be a particularly attractive option.

However the furlough scheme was implemented as a way to assist employers to avoid redundancies. If employees do not agree to furlough leave, or do not agree to other measures such as continuing to work but on a reduced rate of pay, then the employer may be forced to make redundancies. Therefore in our experience of the last recession, employees often agreed to things such as pay cuts to avoid the risk of being made redundant.

What are employees’ rights when a business cuts their pay? Is it different now during the crisis?

Normal employment law still applies, even during the current crisis. However if an employee refused to accept a pay cut then their employer could seek to enforce the change, by dismissing and offering re-employment on new terms. The employer, if challenged in the Employment Tribunal, would then need to justify that change. In the current climate, and the impact that the Coronavirus crisis is having on businesses, employers may well be able to justify the need to reduce pay. Therefore whilst employment law applies, it may well be easier for employers to justify things such as pay cuts than in times of economic growth.

I got a new job in September 2020 after the first lockdown eased. Can my new employer furlough me now or am I prevented from using the scheme as I wasn’t furloughed before?

The Government had previously confirmed that as long as an employee was employed and on the pay roll by 30 October 2020 they could be furloughed under the previous extension even if they were not furloughed before.

Employees who were first reported on an employer’s payroll between 31 October 2020 and 2 March 2021 can be furloughed from 1 May 2021.

There is currently no cut off date either so employers can keep the situation under review and decide to furlough employees at a later date if required.

I was made redundant in early September 2020, I have been told by my old-employer they can re-employ me and place me on furlough leave. Is this right?

Yes. It sounds unusual and many employers will be reluctant to do this given the other employment obligations it creates. However, it is possible under the Scheme for an employer to re-employ anyone who was made redundant or dismissed before 23 September 2020 and place them on furlough.

My employer has asked me to take flexible furlough. What does this mean?

Flexible furlough was introduced in July 2020 and enabled those on furlough to work part time for their employer and remain on furlough for the remaining time. It has been continued under the extension of the furlough scheme until April 2021.

The employer can claim back up to 80% of the non-worked hours from the government under the Scheme until the contribution rate reduces in July and then in August 2021 and must pay an employee in full for any hours actually worked.

It has been used by many employers as a way of bringing people back to work part time whilst protecting the resources of the company whilst the business is affected by the pandemic.

If you have specific queries about how flexible furlough will affect you we recommend you seek specific advice.

I am a parent, can I be furloughed?

Yes. the government has confirmed that you can be furloughed if you have caring responsibilities arising from Coronavirus. This includes caring for children who are at home as a result of school or childcare facilities closing. However, there is no obligation on an employee to place an individual onto the furlough scheme and an employee cannot insist upon being furloughed. Employers should consider exploring other options with employees where appropriate. This may include implementing flexible working, use of unpaid parental leave or using annual leave.

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