Parish HR

The Coronavirus Job Retention Scheme: Furloughing employees during the Coronavirus months.
(v1 27th March 2020)

Introduction

1.1 On 20th March 2020 the Government announced that it would introducing the “Job Retention Scheme”. The purpose of the Job Retention Scheme is to enable employers to retain staff who are not required to work for the foreseeable future, and who may therefore otherwise be laid off without pay or made redundant. Under the Scheme, the Government has committed to paying staff 80% of their usual salary, up to £2,500 per month.

1.2 In order to access the Scheme, employers must “furlough” (or temporarily lay off) affected staff. The term “furlough” is new and refers to a process where staff can be retained as employees, but not undertaking any work. If staff are placed on furlough leave the period of furlough leave must be a minimum of three weeks. The initial period during which staff can be placed on furlough leave is the three months from 1st March to 31st May 2020 but this may be extended. Employers will not be required to place staff on furlough leave for this whole three-month period, but employers may choose to do so. This will depend on whether they are needed to undertake their work during this period.

1.3 It is important to note that the Job Retention Scheme will operate by way of reimbursement. The employer will still need to pay staff in the first instance. The mechanics for seeking reimbursements will not be up and running April 2020 but employers will be able to backdate their application for reimbursement of wages to 1st March 2020.

1.4 The whole process will be managed through HMRC. Applications for reimbursements can be made every three weeks (ie employers can’t claim weekly reimbursements).

1.5 The scheme is available to employees paid through a PAYE scheme and who were employed on 28th February 2020.

1.6 It is anticipated that the Government will issue further guidance on the mechanics of claiming the payment in due course. Currently it expects the scheme will be up and running by the end of April.

2. How does it work?

2.1 An employing organisation (such as PCC, the ODBF and so on) need to decide which of their employees they are selecting for furloughed leave.

2.2 Furlough is likely to be appropriate where there is a reduction in work available and an employee would otherwise be at risk of being laid off or made redundant. Employees who are placed on furlough leave remain as an employee until work becomes available again and will continue to receive pay with the employer reclaiming up to 80% of each furloughed employee’s salary through HMRC (up to £2500 per month).

2.3 The employer may also choose to pay the remaining 20% of a furloughed member of staff’s salary notwithstanding that this cannot be reclaimed from HMRC. The Government guidance confirms that the employer will not be obliged to pay the additional 20%. Careful consideration will need to be given to treat all staff fairly and consistently.

2.4 In addition to the reimbursement of 80% of salary the employer can reclaim associated employer NICs and minimum auto-enrolment pension contributions on that salary.

2.5 The scheme is very specific that any employee on furlough leave MAY NOT work for that organisation during this time – although they can undertake any opportunities for learning, prof development, or volunteer (basically they cannot do anything that generates income for the employer).

2.6 It may be that an employee has more than one part time job so may be put on furlough leave from either or both jobs. In reality this is a scheme to protect employment.

2.7 An employee must be furloughed for a minimum of three weeks and that three weeks can start any time during the duration of the scheme. They can then come off furlough and return to work. (This means that employers cannot rotate staff weekly between furlough and non-furlough).

2.8 There is no requirement to continue the employment of an employee who has been furloughed. Employers will need to decide whether employees will be able to return to their duties, or whether it will be necessary to consider redundancies. These will be subject to the usual rules on carrying out a fair dismissal.

3. Can staff be `furloughed’ if they are absent from work already because they are ill, if they are working from home or on maternity leave?

3.1 Furlough should not be used as an alternative for sickness absence. If someone is absent from work as a result of medical advice and self-isolation guidance and they are receiving statutory or contractual sick pay they should not be placed on furlough leave. However, staff could be furloughed later when they are ready to return to work.

3.2 Employees’ entitlement to statutory maternity pay is unaffected. However, employers who offer enhanced contractual maternity pay can furlough employees on maternity leave to receive support with the cost of that enhanced payment. This also applies for people on other types of similar leave (e.g. shared parental leave).

3.3 An employee must not be furloughed because they are on maternity leave. This could potentially amount to direct discrimination, for which there is no defence, and fair selection criteria should be adopted.

3.4 If staff are working remotely and there is work to do they should be retained and paid as normal.

4. How is the salary calculated?

4.1 The 80% salary is based on the higher of;

(i) the same month’s earning from the previous year (for example if someone is furloughed in March this will be based on earnings from March 2019 if they are furloughed in April it will be based on earnings from April 2019 etc); or

(ii) the average monthly earnings in the 2019-20 tax year

4.2 Individuals will pay income tax and National Insurance Contributions as usual on any payments received as part of the JRS (via PAYE deductions made by their employer). Employees will also pay automatic enrolment contributions on qualifying earnings, unless they have opted out.

4.3 Employers will also need to pay Employer National Insurance Contributions, but as mentioned above, will be able to apply for a grant to cover this.

4.4 The government has stated furloughed employees can be paid the lower of 80% of salary or £2,500, even if it brings them below the national minimum wage.

5. How are staff informed or consulted with them on being designated a furloughed worker?

5.1 There has been some debate about whether employers can impose the decision to furlough on their staff or whether it must be done with consent. The government has now confirmed that any decision must be discussed with staff and any changes made “by agreement”. The guidance also states that “if sufficient numbers of staff are involved, it may be necessary to engage collective consultation processes to procure agreement to changes to terms of employment”. As a starting point staff need to be written to explaining who you have identified as furloughed and ask them to confirm their agreement to this in writing. Should they not agree then it will be necessary to consult with them (over the telephone or video link) to understand their objections and if these can be overcome. Ultimately then consideration will need to be given as to whether to simply notify them of the change of status or alternatively make redundancies. Further advice should be sought at this stage.

5.2 Where all employees or whole teams or categories of staff are identified as not needed to work during this period then selection will be straightforward. However, where a reduction in staffing is required with some staff continuing to work, selection will be more complicated. In these circumstances a fair and objective selection process should be designed in order to justify the designation of all staff as either furloughed or working. It might be appropriate to seek volunteers or alternatively have clear criteria. In all cases there should be a document that can be shared that sets things out clearly the rationale for furloughing staff, and if a selection has to be made, the basis for this.

5.3 The government has stressed that equality and discrimination laws will apply in the usual way when deciding who to furlough. So decisions about who or who not to furlough should not be based on a protected characteristic. No other guidance is given about how to go about selecting who to furlough suggesting the employer has discretion. Nevertheless, it is still likely to be sensible to try to establish a fair selection process and criteria, which in these times, may include consideration of those who fall within vulnerable groups or have additional caring responsibilities as a result of the coronavirus outbreak.

6. Is anyone exempt from the scheme?

6.1 Yes, any employee appointed on or after 1st March 2020 is excluded from the scheme.

7. What if a post has already been made redundant?

7.1 An organisation can re-employ people who have been made redundant since 1st March, and then place them on furlough leave as an alternative to dismissal. It may be appropriate to consider redundancy for certain posts at a later date.

8. Anything else I should remember?

8.1 Furloughed absence is just a pause on day to day working whilst remaining on the pay roll, so the person is still part of the organisation and should be kept up to date with news and information.

8.2 Any furloughed member of staff, and any member of staff off sick continues to attract all their usual employment rights, including the accrual of annual leave so there may need to be a plan of how that leave is then taken when things `get back to normal’ to avoid people all then being off at the same time!

8.3 Throughout any period of sick leave of furloughed absence please do remember that there is still a duty of care and issues of wellbeing, support and pastoral care that should be in place so that people still feel part of things.

9. What about self-employed people?

  • 9.1 There are no steps to be taken here, HMRC will be in touch directly with a self-employed person as there is a specific earnings protection scheme for the self-employed.
    9.2 You may receive queries or challenges from some of your workers about whether they really are self-employed, in which event you should seek advice.

10. Is there further advice and guidance?

The situation surrounding Coronavirus is fast-moving and developing rapidly. The most recent information is on the government’s website:

Advice for employers

Advice for the public

Acas is another good source of information

The NCVO have a useful set of information here. They have also made their members’ resources publicly available.

The Government advice on Furloughed workers here

Guide for employees here

Whilst the HR team at ODBF may be able to help with some enquiries for parishes, ACAS is the best resource. You should also check on the HMRC website and the Gov.uk website for more information

Here is a draft letter informing an employee of being furloughed.

The Coronavirus Act 2020: EMERGENCY VOLUNTEER LEAVE (for employers with more than 10 staff)

The Act introduces the concept of an “emergency volunteer” although new regulations need to be enacted to give effect to the emergency volunteering leave provisions set out in the Act. This is likely to happen quickly.

The measures are intended to incentivise volunteers in addition to protecting those who volunteer but are already in employment. They will enable employees and workers to take Emergency Volunteer Leave in blocks of 2, 3 or 4 weeks’ statutory unpaid leave and a UK-wide compensation fund will compensate for loss of earnings and expenses incurred at a flat rate for those who volunteer through an appropriate authority. This will ensure that volunteers do not suffer financial disadvantage as a result of performing a public good.

The measures include:

  • The ability to take leave;
  • Protection from detriment for taking the leave; and
  • A compensation scheme for loss of income and out of pocket expenses.

Eligibility

Workers and employees are entitled to take emergency volunteering leave, unless their employer employs less than 10 members of staff or they are excluded. Workers may be excluded from taking such leave if they are employed in certain occupations. These occupations are listed in the occupation.

Emergency volunteering certificate

If a worker wishes to volunteer, they will need to obtain an “emergency volunteering certificate” from an “appropriate authority” e.g. NHS, County Council or District Council. This confirms that they have been approved as an emergency volunteer in health or social care and will specify the period during which they can act as an emergency volunteer.

Notification

The periods of leave must be:

  • 2 weeks;
  • 3 weeks; or
  • 4 weeks.

This must be consecutive and must not be taken more than once in any “volunteering period”.

The first “volunteering period” will begin as of 25 March, when the Act was passed into law. It will last for 16 weeks. The government will then decide whether to impose a new 16-week volunteering period. The government can repeal this legislation at any time, presumably once the threat is under control.

Notice to employer

A worker wishing to take EVL must notify their employer that they intend to be absent from work for the period specified in their emergency volunteering certificate at least 3 working days before the start of the period specified in the emergency volunteering certificate and employers must be provided with a copy of that certificate.

Effect on employment

The workers terms and conditions will be preserved but they will not be entitled to be paid for the period they volunteer (unless they are serving their notice period at the end of their employment). The volunteers can apply for compensation through a government scheme to cover lost earnings by taking EVL. At the end of the period of leave, the worker has a right to return to the job which they held before their leave commenced.

If they become sick while volunteering it appears the employer is not required to pay sick pay (but could choose to). At the moment it is unclear what the employer’s liability for pay would be should the worker wish to return to work early.

Furlough

Furloughed workers can take EVL but will not be entitled to receive the pay they would have received had they been on furlough leave.

Protections

The Coronavirus Act 2020 is aimed at both protecting and incentivising those workers who wish to volunteer and will amend the existing Employment Rights Act 1996 as follows:

Workers will be protected from detriment if they either:

  • Seek to take emergency volunteering leave; and/or
  • Make use of the benefits of the leave provisions (essentially claiming loss of earnings as a result of taking emergency volunteering leave).

If an employee is dismissed as a result of this detriment the dismissal will be automatically unfair and the employee will not need to have 2 years’ continuous service to make a claim to an employment tribunal. There will be no cap on the amount of compensation that they can be awarded in those circumstances.

Likewise, if they are selected for redundancy because of their volunteering, then the dismissal will be automatically unfair. Therefore, particular care needs to be taken if there are volunteers in a group of employees at risk of redundancy.

(v1.3 28th March 2020)

Advice from the police

Also, it’s worth remembering that unprecedented times can lead to unprecedented behaviour. We’ve shared stories of hope, of the church reacting compassionately and proactively. But news reports have shown that some people have not responded well. Some have even been aggressive, particularly to our hard-working retail workers.

The Metropolitan Police Business Crime Hub has offered security advice and a reminder that the police whichever force area you are in, are here to help.