We were hoping for a ‘furlough’ free weekend. But the UK Government had other plans!
An update was published in the morning on Saturday 4 April 2020. The government published a guidance for employees and also one for employers.
This article just deals with the clarifications and changes coming from this updated guidance.
What is clear to me is that it is ultimately the employer’s decision to put an employee on furlough (because the HMRC has made it clear that they reserve the right to audit employers for potential fraud – so the risk is the employer’s risk). This has not changed.
The opening words of the employee guidance are “If you and your employer both agree…”. I still think that it is the employer’s decision and discretion to furlough.
The guidance is clear that the scheme is “designed to help employers whose operations have been severely affected by coronavirus” and that employers that cannot maintain their current workforce because of this can make use of the scheme.
RE-STATED: Shielding and caring
The wording in the employer guidance about if an employee is shielding “if they are unable to work from home and you would otherwise have to make them redundant."
The employee guidance says:
“If you are shielding in line with public health guidance or required to stay home due to an individual in your household shielding and are unable to work from home, then you should speak to your employer about whether they plan to place staff on furlough.”
It is the same if the employee is unable to work (from home or on-site) because of caring duties. I think this means that employers do not have to, but have some discretion around furloughing certain groups of employees (eg. Shielding and carers).
CLARIFIED: employees can start another job during furlough
Employees can start a new job when on furlough (meaning they might end up earning 80% of the old salary and 100% of a new one). This was not prohibited in the earlier guidance, but the new guidance expressly allows it. The guidance does say it has to be allowed under the old employment contract, but presumably the old employer can waive that.
CLARIFIED: Commission and salary
An employer can reclaim 80% of compulsory (presumably meaning contractual) commission back from HMRC, as well as basic salary. This is good news for car salesmen and estate agents. But it can only be referring to the commission from past sales as the furloughed employees cannot be completing new sales when on furlough.
CLARIFIED: Benefits
The 80% does not include non-monetary benefits (eg the value of health insurance or a car).
CLARIFIED: Company directors can be furloughed
They can still perform their statutory duties, but not other work for the company.
CONFIRMED: Employees can be furloughed multiple times
They can be furloughed, brought back to work, then re-furloughed (subject to each furlough period being at least three weeks)
NEW: Employers must notify employees of their furlough status in writing and keep the record of that written notification for five years.
Let us know if you have any questions - remember we are here to help and to chat through various scenarios with you.