As this is a fast moving topic, please note that this article is current as at 05/06/20. For further information, please contact Alison Loveday, Richard Bates, Justin Le Blond, Sean Burns, Heidi Bloch, or Shubhangi Pathak.
As first advised in our earlier employment update, the UK Government announced on 20 March 2020 various measures that would be implemented to assist businesses and the UK workforce, including the Coronavirus Job Retention Scheme (CJRS).
The CJRS introduced the concept of furlough for the first time in the UK. Since then, it has had a number of iterations. The scheme was originally designed to be in place until 31 May 2020. That has now been extended to the end of July 2020, when further changes will be introduced to take us to October 2020.
As at 14 May 2020 and according to the Office for national statistics, more than three quarters of UK businesses have applied for the CJRS. The cost of supporting more than 8.4 million individuals through the CJRS is reported to be £15 billion a month.
Although initially the scheme did not allow for variation, the details published subsequently allowed employees to be rotated, with the minimum period of furloughing being three weeks. Many employers who retain some work for employees have therefore implemented staff rotations of three weeks on and three weeks off.
The CJRS is not compatible with the standard employment contract. Initially, the CJRS only provided for 80% of wages or a maximum of £2,500 per month to be paid. Furthermore, no work was to be provided by the employer. If an employee needed to work to develop their skills, this would be a further breach.
Although technically this would give rise to potential claims by employees for breach of contract and/or unlawful deduction of wages, in the vast majority of cases, employees have agreed to be placed on furlough. They recognise the financial pressure their employer is under, and hope that by agreeing to be furloughed, there will still be a business for them to return to at the end of the pandemic.
From 1 July 2020 , employees will be able to undertake some work whilst on furlough, with their employer responsible for payment of the hours worked. From August 2020, the employers’ contribution to wages will begin to increase as set out in our article dated 1 June.
As can be seen, furloughing is an ever changing, evolving concept and we await to see how successful the scheme will be in the fullness of time.
By comparison, other jurisdictions across the globe have adopted their own versions of the CJRS. We provide details below to highlight some of the alternative support that governments have chosen to introduce (or not) to support businesses and individuals during this pandemic.