Is furloughing staff the right option for you?


It has been one of the most challenging weeks we have all known. Businesses are scrambling to cope with a progressive lockdown, while employees are getting used to working at home and all that this entails.

The Government’s furlough scheme is one of many initiatives designed to help preserve business continuity. It provides up to 80% of an employees wages, subject to a maximum of £2,500 a month. But it is right for you?

No working during a Furlough

The scheme is only for employees who are not doing any work. If you put employees you need but can’t afford onto this scheme you will not be able to access their skills as needed. Where finances permit you may want to consider agreeing short time or part-time working so you can at least call upon some resources.

An Unpaid layoff is not a general right

Unless your contract says so, you do not have the right to lay off people with no pay unless they consent to do so. Otherwise, an unpaid layoff will end the contract of employment (a constructive dismissal). Whilst most employees will be understanding in the difficult situation we all face, employment law has not been suspended and you should take care to get agreement to this or any other changes you make to people’s contracts or wages.

Guarantee pay is still a right

Even employees who agree to unpaid layoffs or have clauses giving you the right to do this in their contract, are still entitled to guaranteed pay once they have worked for you for a month. This is 50% of a normal days pay capped at a maximum £59 for up to 5 working days in a three month period.

Can’t afford to run payroll until the Furlough money arrives?

If your employee agrees to be furloughed you must make it plain whether you are going to pay their 80% pay now and wait for the rebate, or whether you are asking them to try to wait until you get the money through. Clear communication and consultation is vital now.

People need to feed their families and anxieties about money can combine with being confined to the house to make a very serious mental health problem.

Support and advice

We all need to help ourselves in these challenging times. If you would like a free furlough form along with advice notes we’d be happy to get them to you. Just click this link here and pop in your email address and we’d be happy to send one to you. If you’d like to stay with us we will be sending more helpful advice and resources and we all work through this.

We all stand together now or we will fall apart.

About the Author Annabel Kaye

We founded Irenicon in 1980 to help employers make employment law work for them. We were always a mixed disciplinary practice – something quite revolutionary at the time. Over the years we have worked with some wonderful organisations, pushing the boundaries of how employment law can really be made to work without restricting the flow of the organisation.

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