COVID-19: How do I inform employees they are to be put on Furlough Leave?

We have already seen a keen interest from our members to utilize the recently announced Job Retention Scheme, for many it appears the only viable option of saving the jobs.

Whilst the Government is still building the dedicated HMRC portal and working out the fine details, the two letter templates below can be used to inform your employees that they are put on the furlough leave.

Remember that to utilize the scheme, either the employment contract must have a clause allowing lay-offs or suspension from work, other than disciplinary, or you need specific consent of your employees to be furloughed.

Please use Template 1 if you are contractually entitled to lay off your staff. Template 2 should be used where there is no such term in the employment contact and consent is required.

It is the decision of the employer how is put on furlough leave and who carries on working. The employee may volunteer to be furloughed but the employer is not required to consent. The furlough leave selection criteria must be fair and non-discriminatory.

The HMRC has announced that the first payments under the scheme should be expected by the end of April 2020.

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TEMPLATE 1


We write following our previous announcement that the company would be exploring the recently announced Coronavirus Job Retention Scheme as an alternative to staff being laid off or being made redundant, in view of the downturn in the company’s business caused by the ongoing coronavirus epidemic [and the closure of our showroom imposed by the Government on 23 March 2020]

[The company consulted with you in a meeting of DATE and it was proposed/agreed that your position should be added to the pool of ‘furloughed workers’.]

The company has decided to invoke the lay-off clause of your employment contract and put you on furlough leave under the Coronavirus Job Retention Scheme.

Your furlough leave starts on [DATE] and will continue for the time being. The company is unable to advise you on the duration of your furlough leave but will endeavour to notify you of the date when your leave ends or provide an estimate of its duration as soon as the company is in a position to do so. We can only advise you at present that the Government has announced that the Coronavirus Job Retention Scheme will last for 3 months initially with a possibility of an extension.

For each day you remain on the furlough leave the company will pay you 80% of your normal wage gross of tax and NI contributions or £2,500 per month gross, whichever is lower. The company cannot top up your pay during the furlough leave to the full normal amount due to the limited resources and the severity of the crisis. Should this change, the company shall advise you accordingly.

It is expected that the normal pay cycle will not be disturbed. However, the Scheme is currently being set up by the Government and the company is dependent on the funds being released under the Scheme. The company shall notify you in case of any delay.

Throughout the furlough leave, you remain bound by all terms of your employment. You must not do any work for any third party either as an employee or a worker, self-employed or a contractor. If you are in breach of this condition, the company may have to withhold your pay or pay you a reduced amount reflecting your breach.


You must remain available for work. The company is entitled to cancel your furlough leave at any time and require you to perform your job role.

Should you fall ill or need to self-isolate, you must notify the company as per the terms of your employment and the notified company procedure.

Throughout duration of the furlough leave you must strictly follow the advice of the Government and stay at home and limit your social contact, only going out if absolutely necessary, for example, to get food or medication, if required by your childcare arrangements or for other most essential reasons.

The furlough leave and the pay arrangement fall within the terms of your contract of employment and, as such, the company does not require your consent to implement the proposed leave. That said, the company does wish to take account of your views. In the circumstances, if there are any issues you wish to raise, presently or at any point whilst you stay on the furlough leave, please contact [NAME] by [DETAILS].

TEMPLATE 2


We write following our previous announcement that the company would be exploring the recently announced Coronavirus Job Retention Scheme as an alternative to staff being laid off or being made redundant, in view of the downturn in the company’s business caused by the ongoing coronavirus epidemic [and the closure of our showroom imposed by the Government on 23 March 2020]

As an alternative to laying off your job role or considering redundancy, the company proposes that you should be put on a furlough leave under the Coronavirus Job Retention Scheme and seeks your consent. 

Your furlough leave starts on [DATE] and will continue for the time being. The company is unable to advise you on the duration of your furlough leave but will endeavour to notify you of the date when your leave ends or provide an estimate of its duration as soon as the company is in a position to do so. We can only advise you at present that the Government has announced that the Coronavirus Job Retention Scheme will last for 3 months initially with a possibility of an extension.

For each day you remain on the furlough leave the company will pay you 80% of your normal wage gross of tax and NI contributions or £2,500 per month gross, whichever is lower. The company cannot top up your pay during the furlough leave to the full normal amount due to the limited resources and the severity of the crisis. Should this change, the company shall advise you accordingly.

It is expected that the normal pay cycle will not be disturbed. However, the Scheme is currently being set up by the Government and the company is dependent on the funds being released under the Scheme. The company shall notify you in case of any delay.

Throughout the furlough leave, you remain bound by all terms of your employment. You must not do any work for any third party either as an employee or a worker, self-employed or a contractor. If you are in breach of this condition, the company may have to withhold your pay or pay you a reduced amount reflecting your breach.


You must remain available for work. The company is entitled to cancel your furlough leave at any time and require you to perform your job role.

Should you fall ill or need to self-isolate, you must notify the company as per the terms of your employment and the notified company procedure.

Throughout duration of the furlough leave you must strictly follow the advice of the Government and stay at home and limit your social contact, only going out if absolutely necessary, for example, to get food or medication, if required by your childcare arrangements or for other most essential reasons.

The proposal of furlough leave has not been put forward lightly but as a measure of saving your job. You are not obliged to consent to this proposal. If you do not consent, the company, with regret, will have to explore the options of laying you off and the redundancy, in view of the precarious position of the company [and suspension of its trade].

If you require any clarification or have any views you wish to put forward, please contact [NAME] by [DETAILS].

[Insert this paragraph if you are proposing to put 20 or more employees on furlough leave:- In view of the special circumstances of the coronavirus epidemic, the company believes that consultation with employees’ representative under s.188 TULRCA 1992 may be dipensed with and will not be undertaken.

If you accept the proposed furlough leave, please fill in and sign as indicated below and return the letter to us. We are sending you this letter in duplicate, please return once copy for your records.

-------------------------------


I consent to the proposed furlough leave arrangements on the conditions set out above. 



Signed: ……………………………    Name:…………………………….    



Date:……………………………….

 

Authors: Kiril Moskovchuk

Published: 24 Mar 2020

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