CommercialMay 15, 2020

Answering your furlough FAQs

On the 12th May 2020, Chancellor Rishi Sunak announced that the current furlough scheme will be extended by 4 months up until October. This move has been a major source of relief for millions of businesses and employees across the company, even though it’s understood that the scheme cannot continue as it stands indefinitely. While the future of the scheme is not fully laid out, we take a look at some of your most FAQs below:

Can my employee do any work for my business under furlough?

No, employees cannot carry out any work for their employers under the current furlough scheme. If you still need an employee to undertake even limited tasks within your business, then you will need to look into other options with the employee in question.

Can my employee work for other people while being furloughed?

Every business is different and as such, the employee/employer contract you have will be unique to you. Even while furloughed, your employee is still bound by this contract. If your employee does want to take up work elsewhere during this period, you will need to both agree on a suitable course of action. While you may not be happy with your employee working with a competitor, you may be more amenable to them undertaking some agricultural or delivery work in the meantime.

What happens if my employee refuses to be furloughed?

The majority of employees will see the benefit of furlough and realise that it’s a much more agreeable option to losing their job altogether but if your employee doesn’t see it that way, you do have due cause to dismiss by redundancy. Employees are required to give their full written consent to furlough and any pay reduction.

Can we put shielding employees on furlough?

Yes, even if your shielding employees still have work they can do, you can put these employees on furlough leave. If an employee is sick or self-isolating due to the virus, they should be put on Statutory Sick Pay and this should not play a part in your decision on whether or not to furlough the employee.

I’ve recently made some employees redundant; can I rehire them and put them on furlough leave?

If you have recently dismissed an employee then you may be able to rehire them to get the furlough salary. For most employees, they will need to have been on your payroll on 19th March 2020 for this to apply but it also applies to many employees on your payroll on or after the 28th February who had their contract terminated before the 19th March.

What happens with an employees’ annual leave during furlough?

Unless an employee chooses to take annual leave during the time they have been furloughed, this should continue to accrue as normal. Employers should not be looking to deduct the remaining leave the employee has during furlough. However, you can require furloughed employees to use up a certain amount of their holiday leave during this time to avoid disruption to your business further on down the line.

 If an employee does decide to take holidays off during furlough, employers can continue to claim for the 80% salary pay from the Government. Employers are required to pay full holiday pay even if this holiday is taken during a period of furlough.

Can my employee come on and off furlough?

If you furlough an employee, this must last for a minimum of three weeks. After this, you are able to take your employee in an out of furlough if you require them to be at work for limited periods.

Can I make an employee redundant while they’re on furlough leave? 

While this scheme has been designed to avoid redundancies, sometimes circumstances can change, and you may find that you need to make some staff members redundant. You can start the redundancy process at any point during an employees’ furlough, you do not need to wait until the period is over. The HMRC has made it clear that furlough grants cannot be used towards redundancy payments.

Will I need to pay more towards my furloughed employee’s salary in the future?

Mr Sunak is considering ways to split the cost of furlough more evenly with companies which will likely involve a reduction of the 80% the Government are currently supplementing. It’s worth keeping on top of the latest updates to ensure you stay ahead of the decisions as they are made.

If you have any questions about how working from home and furloughed employees could affect your current insurance or your employees’ home insurance, get in touch with the team at The Insurance Centre on 01524 848506.