Under Coronavirus Job Retention scheme, the government will pay up to 80% of wages for those employees who would otherwise be made redundant.

All UK businesses are eligible to use the scheme, regardless of size.

How will the scheme operate?

1. The employer will designate affected employees as ‘furloughed workers’ and notify them of this change.

2. The employer will then submit information to HMRC about the employees that have been furloughed and their earnings through a new online portal. HMRC are working to set up this new system to reimburse monies as the current system is not set up to facilitate payments out.

3. HMRC will then give the employer a grant to reimburse 80% of all furloughed workers wage costs, up to £2500 per month per employee.

4. There is no obligation on the employer to make up the remaining 20% wages “but they may choose to do so”.

At the press conference the Chancellor indicated that he hoped the first grants would be paid before the end of April. He also said that claims could be made for wages lost since 1 March.

The scheme is intended to run for three months but the Chancellor said that he would not hesitate to extend.

Do you have to consult with an employee?

From the basic information we’ve seen so far it appears that unlike lay off and short time working (which can be the exercise of a contractual right) you have to seek the employee’s agreement to becoming a furloughed worker.

The employee’s guide states that the employer should discuss becoming a furloughed worker with the employee.

What if you have work for your employees for part of the week?

The employee guide to the scheme makes it clear that during a period of furlough, no work must be done for the employer which  rules out short-time working.

Speak to an expert

For expert employment law advice speak to your chosen advisor, if you do not have an advisor Direct Law & Personnel are employment law specialists and can be contacted on 0330 400 4495.