Flexible furlough available 1 July 2020

1 July 2020

Just a reminder that from today, 1 July 2020, employees who have already been furloughed (the scheme having been closed to new joiners from 10 June 2020) can divide their time between flexible working and furlough.

The precise balance between work and furlough can be any proportion agreed between the employer and employee. The employee should receive full pay for their working time and at least 80% salary (capped at £2,500 per month, gross) – currently fully recoverable from the government under the Coronavirus Job Retention Scheme – for their furlough time.

Whilst on furlough, an employee cannot carry out any work for the employer during the furlough days/hours. However, they are able to undertake training and do volunteer work, provided they do not provide services to or make any money for their employer during furlough. (They are also able to take paid employment with another employer whilst furloughed with the first employer (subject to any contractual restraints/consent).)

There is no obligation on employers to offer flexible furlough but it opens up the possibility of part-time working during furlough and/or phased returns to work.

An employee does not need to be on furlough on 30 June 2020 to qualify for flexible furlough, so long as they had at least three consecutive weeks of furlough between 1 March 2020 and 10 June 2020. The exception to that rule is for employees who are parents returning from extended statutory leave after 10 June 2020 (e.g. maternity, paternity, adoption or shared parental leave returners); they may still join the scheme provided the employer has previously furloughed other employees during the period 1 March 2020 to 30 June 2020 and the other conditions of the scheme are met.

As previously noted, the government contribution to scheme will vary on the following dates:

  • 1 August 2020:  employers will have to pay employees’ (i) national insurance contributions (NICs) and (ii) pension contributions;
  • 1 September 2020:  the Scheme will reimburse 70% of salary (up to a maximum of £2,190) with employers required to top up to 80% (or such level as agreed with employees) and cover NICs and pension contributions;
  • 1 October 2020:  the Scheme will reimburse 60% of salary (up to a maximum of £1,875) with employers required to top up to 80% (or such level as agreed with employees) and cover NICs and pension contributions.

To recap on annual leave:

  • Furloughed workers continue to accrue holiday entitlement during any furlough period.
  • Employees who are furloughed may take annual leave during furlough; they will need to be paid 100% of normal pay (i.e. it will need to be topped up by the employer if the employer is paying 80% during the furlough period).

We note that there is an on-going debate amongst employment lawyers as to whether redundancy consultation periods and/or notice periods can run during furlough. We are happy to discuss the considerations with you should this be relevant to your work.

HM Treasury figures show that at 28 June 2020: 9.3m jobs had been furloughed by 1.1m employers, with a total value of claims made standing at £25.5bn. HMRC’s latest statistics on the scheme can be found here.