Employment Law Update - Covid-19 - Furlough Leave – further details
The Government has now issued further guidance filling in some of the blanks. Unfortunately, there remain obvious omissions, particularly in relation to holiday. For now, all that can be said for sure is that holiday continues to accrue during Furlough Leave. It is possible that it can be taken without interrupting Furlough Leave and that employers have to top up to normal pay whilst holiday is being taken – but that is speculation. Hopefully, further guidance will come as it would be very helpful.
Some clarifications and expansions: -
• It is possible to re-employ an individual and furlough them if they left after 29th February even if the reason for departure was not redundancy. However, before simply doing so employers should work through the consequences of that action.
• As had previously been understood it is possible for a furloughed worker to undertake work elsewhere – provided of course it is not in breach of the contract with the employer.
• Employees cannot be furloughed whilst on sick leave. In my experience, it is amazing how many people who had been sick are miraculously recovered!
• Those employed by an umbrella company can be furloughed. This will help the ‘self-employed’ community which is already being assisted by the delay in the extension of IR35.
• It is possible to furlough company directors provided this is confirmed via a formal resolution of the board of directors.
• For employees being furloughed this must be confirmed in writing and that record kept for 5 years. The implication of this is that HMRC will pay out all claims initially but then when it has more time carefully scrutinise them to look for fraud and inappropriate claims.
• It appears that there may be some other categories of payment which are now reclaimable. The most helpful is compulsory commission payments. This also includes ‘past overtime’ and ‘fees’ but it is not so clear what this relates to. What is also clear is that payment does not relate to discretionary bonus, tips and discretionary commission and benefits in kind such as health insurance.
Take care everyone!
Nigel Tillott, Head of Employment and Regulatory Law, DDI 01452 689100