Understanding your Furlough Agreement
Understand terms that may appear in your Furlough Agreement.
If you are an employee earning over £118 per week and cannot work because you have coronavirus or are self-isolating, you will be eligible for Statutory Sick Pay (SSP). Usually this is payable after the fourth day of illness, but the government has announced that from 13 March 2020, it will be paid to employees from day one.
Please note SSP is usually only available for those who are classified as employed however, if you are a gig worker and/or on a zero hours contract, you may be entitled to sick pay. Check your eligibility for SSP here.
If you need to provide evidence to your employer that you have to stay at home due to having symptoms of coronavirus, an Isolation Note can be obtained from NHS 111 online. If you live with someone that has symptoms, an Isolation Note can be obtained from the NHS website.
SSP is currently £95.85 and is payable for up to 28 weeks. It is worth checking your employment contract or staff handbook though as some employers offer more generous terms.
If you earn less than £118 per week, your earnings are too low to claim SSP but you may be able to claim Universal Credit or Employment and Support Allowance (ESA).
If your employer is forced to close temporarily because of coronavirus or there is no work for you to do, they can apply to the government’s Coronavirus Job Retention Scheme. Providing you are taxed through PAYE, your employer can designate you a ‘furloughed worker’ with HMRC. This will enable them to claim a portion of the costs of your salary. Between your employer and the government contribution, you will receive 80% of your salary, up to £2,500 per month. Your employer can choose to top up your salary further if they wish to.
The scheme is intended to support employees who would otherwise have been laid off or made redundant as a result of coronavirus. On 29 May 2020 the government announced an extension to the scheme, and the advice below reflects the supporting guidance issued on 12 June 2020.
From 1 July 2020, the parameters of the Job Retention Scheme are changing. For your employer to continue utilizing the furlough scheme after this date, you will have to have been placed on furlough on or before 10 June. This ensure that you meet the government's eligibility criteria.
Providing that is the case, after 1 July your employer has the option to bring you back to work on a part-time basis. Your employer will determine how many hours you are able to work. They will also be responsible for paying your wages while in work.
There are further changes to the scheme in respect of how it is funded. From 1 August your employer will have to start contributing to the cost of your furlough. The amount will increase gradually each month until the scheme comes to an end in October. As a result of these changes, your employer may decide it has no choice but to initiate redundancy proceedings. ISM members who find themselves facing redundancy should contact our legal team for assistance by emailing [email protected].
If you have caring responsibilities, for example because you need to look after children, this is considered an eligible reason for your employer to furlough you, and you may wish to volunteer to be furloughed on that basis. At the same time, employers have to be careful not to discriminate against those with caring responsibilities.
If you have more than one job and one of your employers has furloughed you, you can continue working for your other employer(s) without any effect on your pay from those positions. If you are placed on furlough by more than one employer, you are entitled to receive furlough pay from each employer.
Whilst furloughed, you can undertake training courses or work for another employer, providing your employment contract doesn't prohibit you from doing so. Volunteering is also permitted however there is a fine line between what constitutes volunteering and work and ISM members are advised to seek assistance from the legal team before agreeing to any requests made by their employer.
If you own your own company and pay yourself a salary, HMRC has confirmed that you are eligible to furlough yourself providing you follow and keep the appropriate records of the decision to do so. Whilst furloughed you can carry out your statutory obligations under the Companies Act but you must not carry out any work that generates a commercial revenue or provide services for or on behalf of the company.
Anyone who is paid through PAYE can be furloughed, which includes casual workers and those on zero-hours contracts. The decision on who to furlough rests with the employer and ISM members should contact the legal team if their employer has initiated the furlough process or if they have any questions about how it is being applied in their workplace.
ISM members are advised to contact our legal team to discuss their individual situation in more detail but as a general rule of thumb, as an employee your rights are more limited but your employer is required to listen to your concerns and try to find a way to work around them.
Updated 16 June 2020