Furlough Leave and Annual Leave

08 April 2020

Many businesses are taking advantage of the Coronavirus Job Retention Scheme (CJRS) and bringing employees who were made redundant back into employment on furlough leave, so that they can be paid 80% of their monthly salary/£2,500 through the scheme.  Of course, this only applies to employees who were on the payroll from 28th February 2020 onwards.

It is important to remember the reason for the CJRS being put in place: ‘If you cannot maintain your current workforce because your operations have been severely affected by coronavirus (COVID-19), 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 minimum automatic enrolment employer pension contributions on that wage.’

‘If you made employees redundant, or they stopped working for you on or after 28 February 2020, you can re-employ them, put them on furlough and claim for their wages through the scheme’.

Would this scheme be appropriate for all ex-employees who qualify as they were on the payroll on 28 February?  Was Covid-19 the reason for them being let go, or was this decision made prior to the pandemic?  If the answer is no, think carefully before re-instating employees who were previously made redundant.

It is important to remember that a redundancy terminates an employee’s contract of employment, but bringing them back on furlough leave will give them employment status once more.  It is worth noting that annual leave is accrued during furlough leave.

So, how do you protect your business if you are unable to take the reinstated employee off furlough leave, but do not have a job for them to come back to?  If you are in this situation, please contact us so that we can talk through on a case by case basis to find the right solution for your business and the employee.

There has been new guidance from Acas regarding using holiday during furlough:

In most situations, employees and workers should use their paid holiday (‘statutory annual leave’) in their current leave year. This is 5.6 weeks in the UK.

 This is important because taking holiday helps people: 

  • get enough rest
  • keep healthy (physically and mentally)

 If an employee is ‘furloughed’ (temporarily sent home because there’s no work), they can still request and take their holiday in the usual way. This includes taking bank holidays.’

As always Team PSHR are here to help, so please call us on 01473 653000 or contact your Consultant:

emma@pshumanresources.co.uk

paula@pshumanresources.co.uk

Take care and stay safe!

Team PSHR

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