Is furloughing staff the right option for you?


We have all been challenged this week. 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 employee’s wages. There is a wages maximum of £2,500 a month. But is it right for you?

No working during a Furlough

The scheme is only for employees who are not doing any work. You may want to consider agreeing to short time or part-time working so you can at least call upon some resources.

An Unpaid layoff is not a general right

You do not have the right to lay off people with no pay unless they consent to do so. You may have put this right into your contracts but you need to check before you go down this route. Otherwise, an unpaid layoff will end the contract of employment (a constructive dismissal). Employment law has not been suspended and you should take care to get agreement to any changes you make to people’s contracts.

Guarantee pay is still a right

All employees are still entitled to guaranteed pay once they have worked for you for a month. Any consent to layoffs does not affect this. This is 50% of a normal day’s pay capped at a maximum £29 for up to 5 working days in a three month period. (increasingly annually in April)

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

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 are 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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