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Changes To The Furlough Scheme – What It Means For Employers

Changes To The Furlough Scheme – What It Means For Employers
09 June 2020 | Updated 11 June 2020
 

As we start to exit the lockdown, the landscape does not become any easier or more certain for employers. 

The Chancellor’s proposed changes to furlough are clearly geared towards starting to open up the economy, and get people back to work. Test And Trace is a further key part of that relaxation. 

Vanessa Bell, Partner in Prettys employment law team, has been looking at some of the implications of part-time furloughing for employers and HR teams.

 

Changes To The Coronavirus Job Retention Scheme

 

On 29 May 2020, the Chancellor announced several changes to the Coronavirus Job Retention Scheme. Rishi Sunak explained how the scheme will be operating over the next few months and how it will eventually terminate.

Sunak explained how from 1 July 2020, furloughed employees will be permitted to return to work part-time, coinciding with a gradual tapering off of government support. This tapering will begin from 1 August 2020, with employers taking over employer national insurance payments and pension contributions.

 

Part-Time Furloughing

 

The team at Pretty’s law firm, in a webinar discussing the new changes, reinforced the importance of checking current employee furlough agreements, to ensure it allows for part-time furloughing.

Vanessa Bell explained that to be eligible for the scheme, any new flexible working arrangements must be made and confirmed in writing. She also urged employers to make sure these are stipulated contractually, as current furlough agreements are likely to expressly prohibit flexible working.

“Once the full details of the scheme are announced (this is expected to occur on 12 June), we can fully assess what action needs to be taken” said Bell.

“You will need employees to consent on any variation in their furlough agreement.” 

 

“Just remember that as with your furlough agreement, you’re going to need the employee’s consent to any variation in their furlough agreement. In addition, the new rules may set specific requirements in terms of accessing the scheme for any employees working part-time”

–Vanessa Bell

Partner, Prettys Law Firm

 

Ensuring Fairness

 

When determining who to bring back from furlough and deciding what hours they are required to work can be problematic. Employees may have reasons for preferring a particular shift or working pattern, such as childcare arrangements. 

Bell raised the point that there are potential issues around discrimination when choosing who comes on and off furlough, and that employers should be aware of this. There may, for example, if you choose to only bring back your most experienced workforce issues around age discrimination adversely affecting your younger workforce.

 

Redundancy Consultations

 

When it comes to making furloughed employees redundant, if this is necessary there are no changes to this under the new rules currently. As an employer, you are permitted to carry out a redundancy consultation process whilst the employee is furloughed

Bell emphasised that it's worth remembering that, even though most current furlough arrangements require no work to be undertaken by the employee, you are still allowed to make contact with them. As long as you are not requiring the employee to perform work, contact with your employees via personal contact details is permitted within the scheme.

 

Holiday During Furlough

 

When it comes to annual leave, the new part-time furloughing rules may cause a few grey areas. 

Bell urges employers to be aware of the potential for disgruntled employees, in an example where a usually full-time worker’s hours is reduced to three days per week, they will, of course, accrue holiday at a much faster rate than an existing part-time worker.

The full-time worker given in the example may also be able to abuse the new rules when booking a holiday during their part-time furlough period. Effectively they will be able to book a full week’s annual leave only using three days from their allowance rather than five.

Bell encourages employers to look at their annual leave policies, and make temporary amendments if required to prevent any potential for confusion or possible abuse.

Full guidance for employers wanting to use the new part-time furlough scheme is expected to be announced by the government later this week.

Picture: A photograph of a person signing some paperwork

Article written by Ella Tansley | Published 09 June 2020

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