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Category: Employment


Published: 24 March 2020

Furloughing employees - what does it mean?

 

FURLOUGH: Knowing your rights

 

What does it mean? 

It means a leave of absence from work. Although it comes from the Dutch word 'verkof', it is an import from the US, where it has been used to describe federal employees, who were not paid during frequent disputes within the federal government have seen pay stop.
 

Is it legal? 

The term is not recognised in UK law as a particular status of employment but it's something that the employer and employee can agree between them to recognise a temporary situation, such as presented by Coronavirus.
 

What rights does the employee have? 

Details have not been announced of the UK Government's Job Retention Scheme, but if it operates here as it has in the US, then employees will retain their status, but the employer won't have to pay them.
 

What rights does the employer have? 

The scheme is not mandatory, so the employer doesn't have to take part, but if they do, the Government will pay 80% of their salary in the form of grant (so it doesn't have to be paid back) for the duration of the furlough.
 

Is there a cap on it?

The only advice from the Government is that it will be up to £2500 but it's not yet clear if that will include just salary or also pension contributions, which otherwise would stop being paid as well.
 

Does the employer have to pay the difference of 20%? 

No they would not - the employer has the choice. The employer may have people who are still working for them, who of course would expect to receive 100%, and so it may make sense from the perspective of internal relations that the person furloughed gets less.
 

Can I be asked to work if I am furloughed?

You can but this would be an obvious abuse of the scheme and it can be anticipated that rules will be brought in which will make this clear, with penalties attached.
 

Can I refuse to be furloughed?

You can but it would be a high-risk strategy because the employer would then have a very strong case for redundancy dismissal. If this happens the employee would be entitled to payment of notice and a redundancy payment, reflecting the period of employment history.
 

Is everyone entitled to this?

Everyone who has been employed for more than two years. But beware: if the employer goes out of business, then it can't be forced to pay - in that case, an application has to be made to a different Government scheme, and it can take several months to come through.

To find out more, and to see how Livingstone Brown can help employers and employees in this difficult period, email Stephen Smith (This email address is being protected from spambots. You need JavaScript enabled to view it.).

 

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