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COVID-19 – The Coronavirus Job Retention Scheme – What you need to know

For many employers facing a fall in business or cash flow crisis, up until last week, often the only option was to make employees redundant, to let them go or to lay them off.

On the 20th March 2020, the Government announced an unprecedented intervention to protect the jobs of those facing redundancy due to the impact of the coronavirus. This initiative isn’t just open to pubs, restaurants etc. but all UK businesses large and small, including those in the charitable sector.

The Coronavirus Job Retention Scheme is aimed at stopping employers from making redundancies and instead classing employees as “furloughed” on up to 80% of their salary up to a maximum of £2,500 per person, per month for a three-month period from 1 March to 1 June 2020.  The Government have also said that the Scheme will be extended, if necessary.

If your employer intends to access the Coronavirus Job Retention Scheme, they should discuss with you being classified as a “furloughed worker”.  This means that you are kept on your employer’s payroll, rather than being made redundant but you would be sent home and unable to carry out any work for them whilst you are furloughed.

This cannot, however, be imposed on you unless there are conditions in your contract that allow your employer to lay you off from work.

Where no conditions apply there needs to be agreement but if the choice is between being made redundant or being furloughed for a period, most people would take that lifeline.

Whilst you are a furloughed employee, you must not undertake any work for your employer during that period.  Your employer may also choose to pay the difference between the full salary and the 80% but is not obligated to.

The Coronavirus Job Retention Scheme may not apply to those who have already agreed to reduce their hours or salaries.  The Scheme currently only relates to employees and workers but not those who are self-employed.

HMRC are setting up a portal for employers to make claims and no doubt further details will emerge over the next few days and we will provide further updates at that time.

If you have any query regarding your employment during these challenging times, please contact our specialist employment solicitor, Lisa Aitken for free initial advice.

Latest Update: 25th March 2020

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