The government has introduced furlough leave under the newly created coronavirus job retention scheme. This is to enable employers to temporarily ask staff to stay at home without pay but still be kept on the company payroll.
The employer can then apply for 80% of the salary to be reimbursed by HMRC, it is then at the employer’s discretion if they decide to top up the additional 20%, but may depend on their financial circumstances, although they are under no obligation to do so. The aim of the scheme is to avoid making staff redundant or laying staff off, and the hope is that staff are then able to go back into work once the situation improves.
It is worth noting that asking staff to be placed on furlough leave is likely to involve a change to the employment contract already in place. The change would have to be agreed between the employee and employer, although the alternative options available to the employee are likely to be unattractive and involve lay off or redundancy if it is not accepted.
Current employment law will still have effect during these times so it is important that a fair process is still followed.
By Jo Ribchester, paralegal in the employment law department