Furlough, Annual Leave & Return to Work – 2020

Furlough, Annual Leave & Return to Work – 2020
Furlough, Annual Leave & Return to Work – 2020

Introduction

What an unprecedented time the last few months has been, with the introduction of the furlough scheme by the Government. The scheme rules have evolved since its introduction, and this blog contains a summary of the latest advice, particularly in relation to annual leave, where the advice has changed and changed again. Additionally, as lockdown eases in the UK, employers are increasingly focussing on a return to work. This blog “Furlough, Annual Leave & Return to Work – 2020″, explains the steps employers need to take to safely facilitate this. Remember as an employer you should be looking at revising your HR Policies and Procedures and Employee Handbooks. Here at OptHR, we help businesses just like yours during these difficult times with services such as HR Support, Change Management or even Restructures.

The Coronavirus Job Retention Scheme (CJRS) (furlough)

If employers have not been able to maintain their workforce because their business has been affected by the coronavirus (COVID-19) pandemic, they have been able to furlough their employees, meaning employers can claim a portion of their employees wages (up to 80%, capped at £2,500 per month plus employers NI and pension contributions) where the employee has been placed on furlough under the CJRS.

All UK businesses are eligible to participate in this scheme.

To benefit from the CJRS employers need to:

  • Designate affected employees as ‘furloughed workers’ and notify employees of this change – this change remains subject to existing employment law and depending on employment contracts may require negotiation.
  • Submit information to HMRC about the employees that have been furloughed and their earnings through a new online portal.

The CJRS remains in place, without change until 30 June 2020. From 1 July 2020, there are some significant changes to the CJRS, as outlined below:

  • From 1 July 2020, the CJRS will move to ‘flexible furlough’, and businesses will be able to allow employees to work for some of their working time, with the remainder being furlough time (this is not allowed under the current rules of the scheme, where employees must not work at all whilst furloughed). For time worked, employees must be paid at 100% of their normal pay, time on furlough can continue to be capped at 80% of pay. It is important to note that when claiming the CJRS grant for furloughed hours, employers will need to report and claim for a minimum period of a week.
  • The CJRS closes to new entrants on 30 June 2020. From this point onwards, employers will only be able to claim under the scheme for employees that they have furloughed for a full three-week period prior to 30 June 2020. This means that the final date by which an employee can be furloughed is 10 June 2020, in order for a minimum three-week period to be completed by 30 June. Employers will have until 31 July 2020 to make any claims in respect of this period to 30 June 2020.
  • Through June and July 2020, the government will continue to pay 80% of wages up to a maximum of £2,500 plus other employer contributions as per the current scheme rules.
  • From August 2020, the government will pay 80% of wages up to the £2,500 cap, and employers will become responsible for paying the NI and pension contributions for their employees.
  • During September, the government will pay 70% of wages up to a cap of £2,190 and employers must pay 10% of wages, making the total the employee receives 80%. Additionally, employers will remain responsible for their employees NI and pension contributions.
  • During October, the government will pay 60% of wages up to a cap of £1,875. Employers will be responsible for paying 20% of wages and employee NI and pension contributions.

The scheme ends on 31 October 2020.

Useful link

https://www.gov.uk/guidance/check-which-employees-you-can-put-on-furlough-to-use-the-coronavirus-job-retention-scheme

The CJRS and annual leave

Government guidance on holiday entitlement and pay during the coronavirus pandemic confirms that furloughed employees can take annual leave, without the period of furlough being disrupted. Employers must pay furloughed employees their normal rate of pay for a period of holiday, rather than the reduced amount they are able to claim under the CJRS. In practice, this means employer must top up the amount claimed.

Where an employer cannot afford to top-up the employee’s pay, they can refuse any requests for annual leave during the furlough period. Where employees are unable to take annual leave, they may be able to carry it over for up to a further two annual leave years.

There has been further significant speculation about whether employers can require employees to take annual leave during a period of furlough. There is currently not much consensus, or any case law, around this.

Case law, however, has established that the purpose of annual leave is to enable employees to rest from carrying out work and to enjoy a period of relaxation and leisure. Employees may, therefore, argue that taking annual leave during a period of furlough does not meet these requirements. Government guidance currently states that employers should consider if the current 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”.

The safest option may be for employers to allow furloughed employees to carry over annual leave that they do not willingly book during a period of furlough as it is unlikely that a legal position will be established before the end of the furlough scheme.

Where an employer does require an employee to take annual leave (in any circumstances) it is important that the employee is given the statutory or contractual notice of the leave. Where this applies during the CJRS it may be wise to try and seek the employee’s agreement to taking the annual leave rather than enforcing the taking of annual leave.

Planning a return to work

When planning a return to work, employers should consider the following:

  • How to bring employees safely back from furlough, particularly considering any vulnerable, extremely vulnerable or pregnant employees.
  • What is the current government guidance? For example, should employees continue to work from home if they can?
  • What measures can be implemented to protect employees in the workplace, and enable, as far as possible, social distancing
  • Consider how you will manage employee interactions, for example, will meetings continue to be held by phone or video conference?
  • How will communal areas be managed? For example, toilets, kitchens, break rooms.
  • Will additional cleaning be required? Who will do this and when?
  • Will any type of ‘bubble’ arrangement be required to protect employees or the organisation should there be a case of coronavirus?
  • What hours to bring employees back to work, and will this be on flexible furlough or is a permanent change to their working hours required?
  • What changes will need to be implemented to enable employees to attend work safely? For example, will they need to shift their working day so they do not travel on public transport at peak times?
  • Is any additional PPE required for any employee or group of employees? If yes, will employees require any training to use this PPE correctly?
  • Ensure that all the necessary policies and procedures are in place, for example, risk assessments, procedures for employees who are contact by NHS test and trace, or who need to self-isolate.
  • Will you have a return to work meeting with employees prior to the return to work so they understand all the changes in place and the requirements of them upon their return?
  • How much notice will you give employees of their return to work? No notice is required under the furlough scheme, however, it is good practice to give employees notice where possible.
  • Have your long-term resource needs changed? Do you need to take any action, for example, make redundancies, recruit people with different skills?

When planning a return to work for employees, communication is critical. Employers should ensure that they communicate any workplace changes to employees so they are implemented fully. In addition, for many people, this is an anxious time, and communication will be key in ensuring that the return to work is successful.

Useful Links

https://www.hse.gov.uk/coronavirus/index.htm

https://www.gov.uk/government/news/new-guidance-launched-to-help-get-brits-safely-back-to-work

Summary

We hope you have found this article useful as we discuss Furlough, Annual Leave & Return to Work – 2020. OptHR strongly recommend that employers:

  1. Ensure they are aware of the imminent changes to the CJRS and manage their business accordingly.
  2. Ensure that they consider their approach to managing annual leave and communicate this to employees.
  3. Thoroughly plan any return to work.
  4. Thoroughly plan any organisational changes required as a result of the coronavirus pandemic.

Contact Us

For further information, advice or support in updating your written statements/contracts of employment and policies, please contact us at rachel.wade@opthr.co.uk. or call 024 7524 0934

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