What we know so far about the Government's proposal to support employers

You will no doubt have heard about the Government’s scheme to support employers so that they can “furlough” employees rather than lay them off or make them redundant. As yet the details are very sketchy, what has been published is available at https://www.gov.uk/government/publications/guidance-to-employers-and-businesses-about-covid-19
 
Briefly and subject to change as details emerge:

• All UK Businesses will be eligible (sole traders, partnerships, limited companies, LLPs, plc etc.)
• It will apply to all employee who would otherwise be made redundant or laid-off
  • This does NOT mean every employee, just those who you would lay-off or make redundant if there was a reduced capacity required
• Employers will have to agree with the employee that they are to be re-designated as “furloughed” employees, the employee would probably be given three options so it would seem unlikely that they wouldn’t agree;
  • Redundancy
  • Lay-off without pay
  • Furlough with 80% pay (although it’s not yet clear whether that’s 80% of net or gross)
• The employer does not have to top up the missing 20% but would need the employee’s agreement to that reduction or it would be an illegal deduction from wages and subject to a ET claim – see above about reaching agreement, it seems unlikely that the employee wouldn’t agree
  • Furlough Agreement is in the Dropbox if you desperately need to action, but our advice is to hold off for a couple of days if you can, pending Government guidance being published.
• The employment would continue – not yet confirmed but likely that holiday would continue to accrue, whether that could be taken whilst on furlough (and therefore at what rate) is not clear
• HMRC will reimburse to the employer 80% of wage costs (so this might include pension, employer’s NI but that’s not certain) up to a maximum of £2,500 per month
• Employee must not undertake ANY work for the employer during the furlough
• Employer will have to register furloughed employees through a new (yet to be set up) portal

 
That’s all we know for now but we’ll keep you posted.