Covid-19: Recruitment, Furlough & Redundancy

Covid-19: Recruitment, Furlough & Redundancy

During this coronavirus outbreak we know there is a lot of new information around recruitment, the furlough scheme and redundancy and that it's a huge challenge to make sense of it all.

We have therefore pulled together some information, here in one place, on these areas to help you support your employees, the people working in your charity or voluntary organisation.


Employment: Coronavirus job retention scheme (Furlough scheme)

What is it?

Furlough is an American term meaning leave of absence – normally referred to in the UK as being laid off or on temporary leave. The person laid off or on furlough remains employed but is not working. Chancellor Rishi Sunak announced the coronavirus job retention scheme on 20 March, and on the 26 HMRC issued this guidance on the scheme. 

Under the Furlough JRS, the UK Government will fund part of the employment costs of workers who are ‘furloughed’ due to the COVID-19 outbreak.

On 12th May the Chancellor announced the extension of the furlough scheme that was orginally introduced as part of the suppprt package mentioned above. The headlines are that the Coronavirus Job Retention Scheme will continue until end of October, furloughed workers across UK will continue to receive 80% of their current salary, up to £2,500 and that new flexibility will be introduced from August to get employees back to work and boost the economy. You can view the announcement here.

How furlough works?

If you can't maintain your current workforce because your operations have been severely affected by coronavirus, you can furlough employees and apply for a grant that covers 80% of their usual monthly wage costs, up to £2,500 a month, plus the associated Employer National Insurance contributions and pension contributions (up to the level of the minimum automatic enrolment employer pension contribution) on that subsidised furlough pay.

This is a temporary scheme in place for 3 months starting from 1 March 2020, but it may be extended if necessary and employers can use this scheme anytime during this period. It's designed to help employers whose operations have been severely affected by coronavirus to retain their employees and protect the UK economy.

The Government has produced this retention scheme guidance which explains it more fully.

Are you eligible for furlough?

If you do want to claim for your employees' wages through the Coronavirus Job Retention Scheme, you can find out if you’re eligible and how much you can claim due to coronavirus (COVID-19) here.

When your employees are on furlough

There are a few things to bear in mind while your employees are on furlough, you can't ask your employee to do any work that:

  • makes money for your organisation or any organisation linked or associated with your organisation
  • provides services for your organisation or any organisation linked or associated with your organisation

They can however take part in volunteer work or training.

Employee taxes while on furlough

Your employees will still pay the taxes they normally pay out of their wages, this includes pension contributions.

Rates and thresholds for employers 

You can use the rates and thresholds information on this Government page when you operate your payroll or provide expenses and benefits to your employees.


Employment law and redundancy during Covid-19

Southark Law Centre gives this advice: 'Ordinary employment law does still apply during the coronavirus crisis. This means that as an employer you can't reduce the pay of your staff – a reduction in pay would be a breach of their contract (and an unlawful deduction of wages) unless you have their consent to the reduction. As the employer you would need to gain this consent in writing. If pay is cut without consent, your employee could make a claim to the Employment Tribunal for repayment of the deducted wages.'

Redundancy

During this coronavirus outbreak, you may have to manage lots of organisational change, including redundancies. Redundancy is a form of dismissal which may arise because your need for employees to do certain areas of work has ceased or largely reduced. This work could be across the organisation or in a specific area.

If any of your employees have lost their job or been made redundant because of coronavirus, they have certain rights and they may be entitled to redundancy pay. Southwark Law Centre have put together this helpful document on organisational change / restructuring and redundancy.

Notice pay

All employees are entitled to paid notice if they are made redundant. Their contracts will stipulate the length of the notice period. If they do not, statutory minimum notice in the UK is one week’s notice for each complete year of service up to 12 weeks.

Statutory redundancy pay

If an employee has two or more years’ service, they qualify for statutory redundancy pay. This is a formula payment of one week’s pay (capped at £538 from 6 April 2020) for each complete year of service (capped at 20 years’ service). It is then increased by 1.5 for years’ service during which the employee is aged 41 or over.

The HR consultancy Croner are specialists in HR and employment law. In response to covid-19, they are offering unlimited access to their HR and Employment Law helpline to all voluntary sector organisations, free of charge. (Croner is an NCVO Trusted Supplier).

They also have lots of useful information on their website, you can find info on coronavirus employment related queries here.

Online recruitment interviews

If you do have roles advertised and you need to fill these now, you don’t have to wait until lockdown is over. You can continue with your recruitment by advertising your roles online and interviewing using an online platform, such as Microsoft Teams or Zoom.

Annual leave

Due to Coronavirus, the government is relaxing the rules on holiday leave. Your employees will be able to carry over any unused statutory annual leave into the next two leave years. The government will amend the Working Time Regulations 1998 to reflect this. 

Almost all workers are entitled to 28 days statutory annual holiday, including bank holidays, each year. Usually, the majority of the 28 days can't be carried between leave years - this means a worker would lose their untaken holiday if they don't take it in the relevant leave year. The change to allow a carry-over for two years will ensure workers don’t lose their leave entitlements and gives flexibility to business.

Read this Government guidance for more information.

What are your employees' Rights?

It is important at this time that you make yourself aware of your employee’s rights in relation to Covid-19:

  • Employees are entitled to time off to care for a dependent. There is no statutory right to pay for this time off, but your organisation may already have a policy on this. You may want to consider revisiting this policy for the covid-19 situation.
  • Working Families has coordinated this guidance for working families during covid-19. 
  • Advice on your employee's sick leave and sick pay entitlements can be found on the Acas website here.  
  • Croner has also compiled these answers to frequently asked questions about covid-19, including self-isolation and sick pay.  

Department for Work and Pensions (DWP) update

Sign up to Touchbase - Touchbase is news and articles from across government for advisers, employers and organisations that help people find jobs. If you sign up to Touchbase you will get updates on DWP announcements. Special editions are now being produced weekly.

You can also read this latest DWP guidance to employers and businesses around Covid-19.  Plus also check this page regularly for updates on information for employers.

This page provides information about coronavirus and claiming benefits. 


Helpful support and resources 

The four main advice agencies in Southwark have put together this joint update and the following are some other useful sources of information:

 

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