As CJRS (furlough) comes to an end, we look at what you need to know.
The end of CJRS (Furlough)
While most employers have reduced use of furlough considerably over the past couple of months, many staff still have an element of furlough in their pay.
The end date for the CJRS scheme is 30th September.
But what happens when you stop using furlough? Here's some of the frequently asked questions and concerns that may be of use to you.
Frequently Asked Questions
What if my business isn't performing like it was?
Furloughed worked have standard employment rights, but no additional rights with regards dismissal/redundancy then they did previously.
What's the difference between instant dismissal, laying off and redundancy?
Instant dismissal is the act of 'firing' someone, usually for poor conduct/performance.
Laying off means you are asking the worker not to attend work due to the business not requiring them, but that you expect it to be short term.
Redundancy is when someone is dismissed because their role is no longer viable.
More details on all three is below.
How can I instantly dismiss someone?
If the employee has been with you for less than 2 years, the procedure is relatively simple and you can terminate their employment without any formalities providing the reason isn't due to a prejudice. You will still need to pay them any notice and holidays they are entitled to.If they have been there longer than 2 years, to dismiss someone, you would have to go through a disciplinary procedure and instant dismissal is usually appropriate in the case of gross misconduct. For the purposes of 'not having enough business anymore' this is unlikely to be the correct route. However, our HR team can assist if you need to visit this possibility. Roslyns HR & Legal services are FREE to all of our payroll clients. Find out more here.
How do I lay someone off?
You can lay someone off without notice if there is not enough work for the employee. If your contract does not state laying off will be unpaid or at reduce-pay, you must pay them full pay. Otherwise, during this time the employee is entitled to "guarantee pay" which is £30 per day to a maximum of 5 days in any three month period. This means if they are laid off for 2 weeks and work 5 days a week, they'll receive £150 for the first week only. After being laid off for 4 weeks in a row, or any 6 weeks in a 13 week period, the employee is entitled to apply for redundancy. For more information go here.
How do I make someone redundant?
You will need to undergo an evaluation of your business needs and run a consultation with the impacted staff to ensure the fairness of the selection. Staff made redundant will be entitled to several weeks' pay based on the 12-week average prior to the redundancy notice and how long they've worked for you. This differs based on age:
- Half a week’s pay for each full year you were under 22
- One week’s pay for each full year you were 22 or older, but under 41
- One and half week’s pay for each full year you were 41 or older
Length of service is capped at 20 years and if furlough is involved, the pay is based on what they would have earned if they weren't on furlough.
How long the consultation is and who performs the consultation is based on how many employees you are considering making redundant and what kind of contract they are on. We highly advise you get into touch with our HR department for specific advice about your company.
Can I just tell people not to come back?
If your business continues to trade, then you cannot do this without following a proper dismissal procedure. Though if they've been there less than 2 years you can give them a weeks' notice with no formal procedures - providing there was no prejudice.
Do I have to pay notice periods?
Yes, if you choose to dismiss someone, they will be entitled to a notice period if they have worked for you more than a month. This has to be paid at 100% even if they are on furlough, but you will be able to claim 80% back (70% from 1st July, 60% from 1st August). The notice period depends on your contract, but the statutory minimum is based on length of service.
- 1 month to 2 years: 1 week
- 2 years to 12 years: 1 week per year worked.
- 12 years+: 12 weeks.
How much notice does my employee have to give me if they want to resign?
If an employee resigns, your contract should state how much notice they must give you. Often this is based on length of service. If the contract does not stipulate this, then the statutory minimum is 1 week. The exception being employees who have been with you less than 1 month, they need not provide any notice.
Do staff have to work their notice period?
That's entirely up to the employer. They have a contractual obligation to work and be paid during their notice periods, whether that be due to resignation or dismissal, however, you may decide to instead:
1) Put them on 'garden leave' or
2) Pay their notice period in one lump sum.
1) Garden leave means they do not come into work, but pick up full pay, during their time on garden leave they must be available for work should you need to call them in. You can still claim a portion of this back if also on furlough.
2) Payment in lieu of notice (PILON) means you pay them their entire period of notice in one lump sum and do not expect them to work it or be available to you at all. However, do be aware in this scenario you cannot claim any furlough back.
I never had my staff sign a contract; do I still have to adhere to notice periods?
Yes, the statutory minimums set out by the government must always be adhered to even if a contract is not signed.
Can I reduce an employees hours permanently?
This entirely depends on your contract with them. If the contract guarantees X hours, providing you do not drop below that, there is no contractual issue.
If the contract specifics a working pattern, that working pattern must still be honoured, but any additional overtime/hours they must have been accustomed to does not.
You can also offer them a new contract with lower hours, or a temporary agreement with lower hours. Should they refuse, you can then follow one of the aforementioned dismissal routes. It's also possible that as part of the redundancy consultation it is decided everyone's hours are reduced in their contract thus negating the need to dismiss anyone.
If no contract is signed and their hours are not in any written statements, their usual working pattern or hours would be considered their contractual agreement.
What if a staff member refuses to return to work?
If a staff member refuses to return to work you can stop paying them furlough. If they are ill, then you must pay sick pay in the usual way, if they have no good reason for refusing, you can begin disciplinary procedures in the same way had they refused to work pre-COVID. As mentioned earlier, if they've been with you less than 2 years, you can effectively remove them immediately without a full disciplinary procedure.
Moving away or getting a second job are not 'good' reasons for them dishonouring the commitment they made to your business.
Can my employee work a second job while on furlough?
This entirely depends on your contract with them. If the contract specifically states they cannot work elsewhere while working for you, you can prevent them doing so, or discipline accordingly if they do it anyway. However, you may also choose to let them even if the contract says otherwise. If the contract does not mention it, you cannot stop them getting additional employment.
They must still of course meet their contractual obligations to you and be available for work as per the commitments made as part of their employment.
An employee wants to take holiday on return, but they've just had a year off, are they entitled?
Holidays still accrue as normal during furlough. Additionally, law introduced during the pandemic states employees can carry forward holidays for up to two years if not given ample opportunities to utilise them. What constitutes as ample opportunity is a little woolly, but we suggest requiring your staff to take holidays while they are on furlough or at least documenting you tried to get them to take their holidays should you not wish to let them be carried forward. However, while they are entitled to all those holidays, you can refuse specific requests if it would leave the business vulnerable in their absence, though we advise where possible you suggest an alternative.
Can I require holidays to be taken when staff are on furlough, and should I?
Yes, you can. Furlough effectively means they are still working and therefore their contract and rights generally remain as before. This means that unless your contract states otherwise, you can require someone to take holidays by giving them twice as much notice (in calendar days) as the number of days holiday you want them to take. For instance, if you wanted a member of staff to take 5 working days off, you'd need to tell them 10 calendar days in advance.
If someone on furlough is taking holiday, you will need to pay them 100% of their pay, but you will be able to claim back 80% (70% from 1st July, 60% from 1st August) of that pay, effectively meaning you've only paid the top up. However, if they are no longer on furlough when they take their holidays, you will be paying 100% and have them absent from work when they are likely to be needed.
I'm concerned about something else or would like additional clarification/assistance; can you help?
Absolutely, please contact our dedicated HR & legal advice line and we'll do our best to assist.