The Coronavirus Job Retention Scheme, known colloquially as the ‘furlough leave’ scheme, will end on 30th September 2021. The scheme, which has been in place since March 2020, has been extensively used by employers throughout the UK; as of 14th July 2021, approximately 11.6 million jobs from 1.3 million different employers were furloughed. By the end of the scheme, it is estimated that the UK government will have spent up to £80 billion on payments. The latest available data shows that 1.9 million workers were still on furlough at the end of June. The Institute for Employment Studies is reporting that many employees on furlough may face redundancy at the end of the scheme. An employer contemplating redundancies would need to consider the following:

1.     Is it a genuine redundancy situation?

Section 139(1) of the Employment Rights Act 1996 confirms that a genuine redundancy situation exists if the employer:

·         Is closing the business for which the employee was employed; or

·         Is closing the specific location at which the employee was employed to work; or

·         No longer needs the employee’s role to be carried out; or

·         Needs fewer people to carry out work of a particular kind

It goes without saying that ‘redundancy’ should not be used as an excuse to dismiss an employee who has bad performance or a poor attendance record or who has committed misconduct.

2.     Warn the employees of the potential redundancies

An employer is required to explain the reason for the redundancy situation and the potential impact that this will have on the affected employee/s.

3.     Create and apply a fair selection pool (and non-discriminatory scoring criteria)

If an employer is closing a business, or only removing one role (or one specific role) from the business organisation, there will generally be little need to select which employee is to be made redundant. However, if the employer is reducing the number of employees it requires, the employer will need to be able to justify which employee is subsequently selected for redundancy. Possible selection criteria can include such things as the employee’s performance (if supported by objective data) and/or their disciplinary records etc.

4.     Consult with employees

If more than 20 employees are to be made redundant within 90 days, an employer’s consultation obligations are more specific and require the appointment of employee representatives with whom the employer should consult. If there are fewer than 20 employees, the employer should consult and meet with the employees directly, explaining why they have been selected for redundancy.

5.     Explore suitable alternative employment options.

Just because an employee has been selected to be made redundant does not mean that the employee should be made redundant. The employer should then consider whether there are any suitable alternative roles available for the employee within the business, taking in to account the skills, experience, and current terms and conditions of the employee.

6.   Dismissal

If, after following the above and exploring all the options, there are no suitable alternatives, an employer can take steps to dismiss the employee. The employer can invite the affected employee to another meeting and clearly explain the decision. The employer should then write to the employee to confirm the dismissal, clearly stating their termination date. An employer should also generally offer the employee a right of appeal.

An employee who will have two years’ service by the termination date and who is working their notice for redundancy is entitled to reasonable time off to look for another job.

7.    Redundancy Payments

An employer can either have the employee serve their period of notice, or pay the employee in lieu of them working it. The employee should also receive payment for any accrued but untaken holiday entitlement.

An employee has the right to statutory redundancy pay if they have been employed for two years or more. This amount is based on their age and length of service, at a maximum of £544.00 per week for 30 weeks. The maximum statutory redundancy pay an employee can currently receive is £16,320.00.

Some employers offer an enhanced redundancy payment under what is known as a Settlement Agreement. A Settlement Agreement confirms that the employee waives their rights to bring any claim against their employer for any alleged breach of their employment rights, usually in exchange for some enhanced payment. For a Settlement Agreement to be valid and binding, an employee must take legal advice on its terms, something on which Franklins Solicitors LLP can advise you upon.

If you are an employer considering making redundancies, or an employee who has been made redundant or is being offered a Settlement Agreement please contact Ben Stanton on 01908 660966 / 01604 828282 or by emailing ben.stanton@franklins-sols.co.uk.

Almost £20bn had been paid out to over a million employers in furlough grants by 7^th June 2020. Whilst the guidance on the furlough leave scheme has been regularly updated, two messages have been consistent:

1. The employee must not carry out any work for their employer whilst on furlough leave; and
2. HMRC has always confirmed that it intended to investigate incorrect and fraudulent claims for grants under the scheme.

The furlough leave scheme guidance confirms that an employer must pay an employee a minimum of 80% of their wages whilst on furlough leave. Whilst the amounts that an employer can claim back from HMRC from 1^st August 2020 onwards will begin to reduce, the employer will still need to pay a minimum of 80% wages to the employee.

By the end of May, HMRC had received almost 2,000 reports to its digital reporting service of fraudulent use. The majority of complaints involved employees being placed on furlough leave but then being asked by their employer to carry out some work at the same time. This is a clear breach of the terms of the scheme.

Guidance updated on 12^th June 2020 confirms that the claims portal will allow employers to declare mistakes that they may have made in previous claims, which can then be offset in their next claim. This amnesty gives employers the opportunity to resolve any issues that may have arisen before any action is potentially taken by HMRC. The guidance also allows employers to raise any error that has resulted in an under-claimed amount.

If you have made a claim, please take time to check that you have submitted your information correctly. If you would like advice on this, or any other aspect of the furlough leave scheme, please contact Ben Stanton on 01908 660966 / 01604 828282 or by emailing ben.stanton@franklins-sols.co.uk.

As of midnight on 24^th May 2020, 1 million employers had placed their employees on furlough leave under the Coronavirus Job Retention Scheme (CJRS). The total value of claims made was £15 billion and the Government estimates that this has protected around 8.4 million jobs. On 29^th May 2020, Rishi Sunak announced the creation of ‘Flexible Furlough Leave’, an attempt to create a transitional period to allow employees to gradually return to work.

The flexible furlough scheme means that:

• From 1^st July 2020, employers can bring back to work employees that have previously been furloughed for any amount of time and any shift pattern, while still being able to claim the furlough leave grant for any normal hours they have not worked. Employers will be able to agree any working arrangements with previously furloughed employees.
• When claiming the grant for furloughed hours, employers will need to report and claim for a minimum period of a week. This is a minimum period and those making claims for longer periods such as those on monthly or two weekly cycles will be able to do so.
• To be eligible to reclaim the grant, employers must agree with their employee any new flexible furloughing arrangement and confirm that agreement in writing.
• Employers can claim the grant for the hours their employees are not working calculated by reference to their usual hours worked in a claim period. Further details are going to be provided by the Government on 12^th June 2020;
• Employers will need to report hours worked and the usual hours an employee would be expected to work in a claim period.
• For worked hours, employees will be paid by their employer subject to their employment contract and employers will be responsible for paying the tax and NICs due on those amounts;
• The number of employees an employer can claim for in any claim period cannot exceed the maximum number they have claimed for under any previous claim under the CJRS. An employee will only be able to use the flexible furlough leave scheme for the employees it has already furloughed.

The changes to the CJRS means that employers will not be able to place any new employees on furlough leave after 30^th June 2020. From this point onwards, employers will only be able to furlough employees that they have furloughed for a full three-week period prior to 30^th June. This means that the final date by which an employer can furlough an employee for the first time will be 10^th June 2020, in order for the current three-week furlough period to be completed by 30^th June. Employers will have until 31st July to make any claims in respect of the period to 30^th June.

If you would like assistance in placing your employees on furlough leave, or if you are an employee who has been placed on furlough leave and would like to discuss your rights, please contact Ben Stanton on 01908 660966 / 01604 828282 or by emailing ben.stanton@franklins-sols.co.uk.

Many employers have now taken advantage of the Coronavirus Job Retention Scheme, placing employees on furlough leave to allow them to be eligible to recover a grant of up to £2,500.00 gross per month (or 80% of the employee’s wages, whichever is lower).

The guidance on the scheme has been amended twice since it was first announced, giving additional clarity to what was a hastily put together emergency scheme. Our employment solicitor, Ben Stanton, has created two videos to advise on the terms of the scheme. Click on dates below and you’ll be redirected to the respective videos:

• 20th March 2020
• 1st April 2020

As these videos were created as soon as any information was released, some of the information has since been clarified by the Government’s updated guidance of Saturday 4^th April, although the terms of the scheme are still as outlined in the video.

Disappointingly, the Government has still failed to clarify whether an employee can take annual leave during a period of furlough leave. However, in its stead, ACAS has released its own guidance to confirm that:

“If an employee is ‘furloughed’ (temporarily sent home because there’s no work), they can still request and take their holiday in the usual way. This includes taking bank holidays.”

This confirms that if an employee wishes to take annual leave during furlough leave (or if an employer wants them to take annual leave), the employee can take their annual leave and be paid in accordance with their contractual entitlement, whilst remaining on furlough leave.

As an alternative, the Government announced The Working Time (Coronavirus) (Amendment) Regulations 2020, a piece of emergency legislation which permits an employee to carry over 4 weeks’ untaken leave where it was not reasonably practicable to take it in the leave year “as a result of the effects of the coronavirus (including on the worker, the employer or the wider economy or society)”. Holiday entitlement can now be staggered over the next two years, rather than employees having to take their holiday entitlement when they return to work.

If you would like assistance in placing your employees on furlough leave, or if you are an employee who has been placed on furlough leave and would like to discuss your rights, please contact Ben Stanton on 01908 660966 / 01604 828282 or by emailing ben.stanton@franklins-sols.co.uk.

On 20^th March 2020, the Chancellor of the Exchequer, Rishi Sunak, introduced furlough leave. Whilst placing an employee on furlough leave is commonly-used in the United States, furlough leave is an entirely new UK legal concept.

Currently, if an employer closes its workplace or does not have any work to provide its employees and wanted to send them home, the employer is still obliged to pay employees their normal full pay if it had no work to provide to them. The exception to this is if the employer already has a contractual right to ‘lay off’ an employee, by sending them home without work; such a clause is commonplace in the building and aviation industry, but less so in others.

The Coronavirus Job Retention Scheme (otherwise known as the introduction of ‘furlough leave’) now means that whilst employers would still have to pay 100% of their employees’ wages if they asked them to remain absent from work, they could claim back 80% as a grant from HMRC, up to a maximum of £2,500.00 per month. On top of the 80%/£2,500.00, HMRC will also reimburse the employer the equivalent Employer’s National Insurance Contributions, together with the minimum employer auto-enrolment pension contribution. The employer should pay the employee 80% of the wages that they were paid on or before 19^th March 2020.

Whilst furlough leave was announced on 20^th March 2020, we had to wait until the evening of 26^th March 2020 to receive further details of the scheme. However, now that we have the details, we are able to offer our clients clear and detailed advice as to how to comply with this scheme and how to place employees on furlough leave correctly, in order to allow employers to claim back the furlough leave grant from HMRC.

If you would like assistance in placing your employees on furlough leave, or if you are an employee who has been placed on furlough leave and would like to discuss your rights, please contact Ben Stanton on 01908 660966/ 01604 828282 or by emailing ben.stanton@franklins-sols.co.uk.