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Changes to the furlough scheme – are you aware of the restrictions?

Towards the end of 2020, the Chancellor announced the furlough scheme’s extension until 30 April 2021, which will continue to contribute 80 per cent towards employees’ wages.

Despite some similarities to the initial scheme in March 2020, this time around the Coronavirus Job Retention Scheme (CJRS) has further restrictions on its usage than before, most likely to keep its continual cost low. The main changes to consider are below.

Employees on annual leave

The rules on taking annual leave while furloughed remain the same. Businesses must pay their employees in full for this time.

Employees serving a notice period

With the rules of the initial CJRS, there were no restrictions regarding furloughed employees who were also serving their notice period, and they could be subject to redundancy whilst on the scheme.

However, now, employers cannot claim furlough grants for employees serving contractual or statutory notice periods from 1 December 2020 – be that for notice of redundancy, resignation or retirement.

Employees on Statutory Maternity Leave

Employees on maternity leave who wished to return early while the first CJRS was running were initially placed on furlough providing they gave at least eight weeks’ notice of their requested return. Of course, employers had to wait the eight weeks until furloughing their staff member. Under the extended CJRS, the notice period could be shorter in certain circumstances.

Employees on sick leave

The Government guidance states that employers can decide if they keep an employee on the furlough scheme or put them on sick leave, in the event of illness. If the choice is sick leave, employers need to pay their employee the necessary Statutory Sick Pay, if they qualify.

Despite the extension of the furlough scheme, further redundancies are expected in the coming months, with the furlough scheme set to end in April 2021.

Redundancy and dismissal

If your employee has been on ‘furlough’ during the coronavirus (COVID-19) pandemic, businesses must use their full normal pay when working out redundancy pay.

Amanda Hyam a Senior Associate with Mander Hadley, who specialises in employment law, said: “It is important to remember that there are strict rules which all employers must follow when making redundancies.

“If you do not follow a reasonable procedure during the dismissal process, your employees might be able to take legal action against you and seek compensation.

“Although, employees must have held their job for at least two years prior to being dismissed, to earn the right to challenge their employer, there are a number of automatically unfair dismissals which do not require a set continuous service period and a failure to follow the rules may lead to costly employment disputes or an employment tribunal.”

For more information about how Mander Hadley Solicitors can help employers or employees with employment law matters including redundancy, settlement agreements and employment tribunal support, please contact us.

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Amanda Hyam

Amanda Hyam

Associate – Dispute Resolution / Employment
I have specialised in Dispute Resolution, Civil Litigation and Employment law for more than 15 years.  I understand how daunting the prospect of litigation can be and because of this I am always available to discuss concerns.

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