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Furlough Leave Corvid-19

Retaining Jobs and Income COVID-19 Furlough Leave

Furlough Leave

Retaining Jobs and Basic Income (Covid – 19)

What is it?

On Friday, 20 March 2020 the Chancellor announced further measures to help businesses survive the current crisis caused by Covid-19 (Coronavirus).

A key part of that package was the announcement of “Furlough Leave”, which is aimed at retaining jobs and giving employees a basic income until they can return to work.

How does it work?

Information about Furlough Leave is a bit scarce at the moment as the government hasn’t yet published its detailed guidance.

But, what we do know is this:

Employers - Employers will need to designate affected employees as being on Furlough Leave and then notify them of that fact. Employers will then need to notify HMRC through an online portal, which hasn’t been set up yet.
Employees - The employee will not be able to carry out any work for their employer. In exchange, they will be paid 80% of their pay, up to a maximum of £2,500 per month.

The government guidance suggests that the scheme will run for at least 3 months and payments will be backdated to 1 March 2020.

Whose choice is it?

First and foremost it is for the employer to choose who they want to put on Furlough Leave.

Once they have made their choice it is likely that they will then need to seek the consent of each employee to place them on Furlough Leave. This is because employers are changing the status of employees and this remains subject to existing employment law.

Therefore, unless the employment contract provides that the employer can withhold work and pay, the employee will need to agree to the change of status. That said, it is likely that most employees will agree in the circumstances.

We will let you have more information once it is available.

Employment Law - Businesses Employment Law- Individuals
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