Chancellor Rishi Sunak has announced an employment and wage subsidy package in an effort to try and help businesses protect the jobs of millions of workers. Many businesses have been facing the prospect of closure or the loss of many jobs in the wake of the Coronavirus pandemic.
The financial package includes the Coronavirus Job Retention Scheme whereby the government will pay up to 80% of the wages (up to £2500 per month) of employees not working but who are “furloughed” and kept on the payroll. This applies to all employers across all sectors. The scheme will backdate back to 1March and is open initially for 3 months, however, the government has stated that it will extend this scheme if necessary. The government has made it clear that they are putting no limit on the funding available.
At present, the concept of “furlough” does not exist in UK employment law. It is something that has been introduced specifically to deal with this situation. The government has confirmed that designating employees as furloughed workers will involve changing their employment status. This remains subject to existing employment law and, depending on the employment contract, may be subject to negotiation.
The Employment team at Hugh James has been working closely with businesses during this time to help them navigate through the employment implications caused by the pandemic and will continue to monitor developments coming out from Government.
For further advice on Coronavirus Covid-19 related employment queries please contact our dedicated Employment and HR Services team.