Examples of furlough queries and Visionary feedback

We’re getting quite a few enquires about furlough and the broader strategic implications of managing an organisation through such times and as you’d expect there are common themes to the issues faced by local sight loss charities.

What we’ve tried to do below is summarise some of the main issues and conversations being had with members in order to help your own considerations.

We must emphasise that we’re reacting to members inquires here – we’re not pushing any particular agenda other than creating supportive safe spaces for members to discuss their individual concerns and to walk alongside them as they come to their own conclusions about the next steps.

The notes below are summaries of key points from spoken conversations and longer discussions held with people – please do bear that in mind when reading them as a lot more detail, depth and context comes across in the spoken word rather than the blunt text as below.

Contact us for help and advice

If you would like to discuss any aspect of furlough then please do contact us. And don’t be shy to call us, a phone call and conversation can often be more swiftly dealt with than an e-mail inquiry and we are very aware that people often need swift answers to queries.

Its an evolving situation – Consider helping us

We are keen to grow our experience and knowledge in such fast changing times so that we can better support our members so we’ll keep updating this page with anything that comes along.

Please do share with us your questions, queries, views and most importantly your experiences – what have you done? why? how? We’d love to be able to share that with others so that we can all increase our understanding.

Anything asked or shared will be anonymised.

FAQ’s

What if employees have some work but not enough?

Employers can arrange staffing needs differently, for example:

Keeping some (perhaps essential) people working full-time on normal pay and others not working on furlough pay. Alternatively, employers can rotate the furlough by having some employees on furlough and others fully working. Then after at least three weeks those fully working can be on furlough and the others start working again.

We have some employees on furlough and think that they might be doing basic admin, replying to e-mails, handing over info to others etc..?

They shouldn’t be doing such work.

When employees are on furlough, they must not to do any work for their employer that:

  • makes money for the employer or any organisation linked or associated with it
  • provides services for the employer or any organisation linked or associated with it.

Furloughed employees can do volunteer work or training without jeopardising the furlough payment, as long as they don’t provide services or generate revenue for the employer.

If employees do not agree to be furloughed can we dismiss by reason of redundancy?

Yes, if employees do not agree to be furloughed employers can dismiss by reason of redundancy if the redundancy definitions are met and a proper process followed.

Some employers may feel that the long-term effect on their business will be inevitable closure or rationalisation. If employers feel furlough is likely to be followed by redundancies it may help to select employees for furlough using a process similar to redundancy selection. This would involve using objective criteria, such as a scores matrix based on skills, productivity, previous appraisals etc.

Can employers back date furlough to 1st March even if those employees have been working since?

No. Furlough grant payment eligibility starts from the moment the employee is furloughed.

What happens about employer NI and pension contributions for furloughed employees?

Employers are still liable for employer NI and employer pension contributions on behalf of their furloughed employees but can claim for these under the scheme. The reclaimable NI and pension elements are based on the furlough salary, not normal salary. (i.e. 80%) of normal salary).

Can we delay wage/salary payments until April or when furlough grants come through?

There are no special rules or guidance about delaying payment of wages due before the April government payments arrive. Employers can use the business interruption loans to bridge the cash flow until the employer is reimbursed by the government.

Alternatively, any delayed wages could be dealt with by agreement with the furloughed employees. If the employer is really struggling the employee may accept payment by instalments pending arrival of the government payments, but the employee has to agree to this.

Theoretically employees who are paid late could issue breach of contract or unlawful deductions from wages tribunal claims. Both issuing the claim and mandatory Acas pre claim conciliation can be undertaken remotely due to COVID-19. However, the scheme payments will come through in April and this is likely to be before the Acas pre-claim process could be concluded and proceedings issued.

If furloughed workers do not book any holiday time does holiday leave accrue?

Yes as employees remain employed during furlough leave statutory holiday will accrue during the furlough period.

The statutory minimum holiday of 5.6 weeks per year will accrue, but the precise amount of holiday left will depend upon how much holiday the employee has already taken. If the employer provides contractual holiday, above the statutory amount, employers can ask the employees to agree this will not accrue during furlough. However, the right to accrue annual leave under the Working Time Regulations will continue unless the employee books part of the furlough period as leave.

What happens to workers who have been unable to take their statutory annual leave entitlement due to the COVID-19 lockdown or because they have been needed to work?

Workers who have not taken all of their statutory annual leave entitlement by the end of 2020 due to COVID-19 have a new legal right be able to carry it over into the next two leave years. Employers’ leave years will vary; in some cases this period aligns with the calendar year, in other cases the financial year, the academic year, or the anniversary of when the employee started employment.

UK workers are usually entitled to 28 days holiday per year including bank holidays. This entitlement cannot normally be carried forward into the next leave year unless the employee:

  • agrees this with the employer; or
  • is on long-term sickness absence; or
  • is on maternity leave and unable to take all of her entitlement as a result.

Payments in lieu of holiday are usually disallowed unless the worker is leaving the employer. However, this has been changed under amendments to the Working Time Regulations.

New provisions

To prevent workers losing their holiday and to enable key workers to keep working, the normal rules on carrying over annual leave have been modified. This will support provision of staff in key sectors (such as food and healthcare) during the pandemic without them losing out on holiday entitlement.

Employers can now allow up to four weeks (not the full 28 days) of unused leave to be carried into the next two leave years. The rules say that it must be ‘not reasonably practicable’ for the worker to take some, or all, of the holiday to which they are entitled due to the COVID-19. If so, they can carry four weeks forward for two years. The remaining 1.6 weeks of holiday can be carried forward by one year by agreement.

These amendments to the Working Time Regulations 1998 apply to all employees. Workers who do not have employee status such as agency workers, and some casual and zero-hours contract workers are also included (see Working Time (COVID-19) (Amendment) Regulations 2020). The only exceptions are those covered by regulations other than the Working Time Regulations 1998 including some merchant seamen, fishermen, and civil aviation staff, some armed forces staff and doctors in training to whom special rules apply.

The normal obligations on employers to ensure workers take their statutory entitlement in one year or incur a financial penalty are also lifted.

Can workers cash in holiday to top up their 80% pay?

The government guidance does not address if furloughed workers can cash in holiday to top up their 80% salary pay, if the employer has chosen not to top up the pay anyway.

Depending on the wording of the contract, most employees have to agree to being furloughed, especially if the employer is not topping up their pay. Therefore, an employee who is worried about the drop in income may propose taking holiday between two dates on full pay, but then only agree to being furloughed before or after that time. If the employee does this, then the employer should pay full salary for the holiday part of the period.

Employers can of course refuse employees’ holiday requests, so an employer can say no to a request for holiday in what would otherwise be a furlough period. The employer must give as much notice of a refusal as the amount of leave requested, so two weeks’ notice if the leave requested was for two weeks. However, employers may prefer employees to use up their holiday allowance rather than storing it up. There are special COVID-19 rules on the ability to carry holiday forward into the next leave year; see above on this.

If employees book holiday time after being placed on furlough employers can claim for 80% of the holiday pay through the grant, in the same way as wages or salary. It seems that the employers have to top the holiday pay to the full salary amount.

Can employers require furloughed employees to use up their holiday leave during furlough?

Yes, employers can require furloughed employees to use up their take holiday leave during furlough. Employers may want to do this to reduce outstanding annual leave to be taken once the lockdown ends and businesses return to normal.

Standard employment law provisions (which are not frequently used) state that employers can require/force workers to take holiday as long as they give twice as many days’ notice as the period of leave the worker is required to take. For example, if the employer requires the worker to take two week’s annual leave at a certain time, it must give the worker at least four weeks’ advance notice (or whatever is outlined in the employment contract).

So, an employer could furlough the employee and require a proportion of that to be annual holiday as long as the requisite notice is given.

Updated Acas guidance clarifies that employees can ask for and take holiday leave as usual while on furlough. However, this is a complicated issue, particularly in relation to pay, and employers should seek specific advice.

It appears that whislt someone is on furloughed and then takes holiday leave (optional or forced) then the employer must pay them 100% of their usual salary. However the employer can claim back 80% under the furlough scheme.

Previously booked holidays

An employee may no longer want to take time off they’d previously booked, for example because their hotel cancelled the booking. Their employer can insist they still take the time off, but it’s best practice to get agreement from the employee.

If the employee wants to change when they take this time off, they’ll need to get agreement from their employer.

Can I place an employee on furlough instead of SSP?

Employees on who are on sick leave or self-isolating should get Statutory Sick Pay. Employers can place them on furlough leave after the sick pay period if there is no work for them to do and they would otherwise be laid off or made redundant.

The government guidance says that employees who are shielding themselves in line with public health guidance can be placed on furlough. This means employees who are extremely vulnerable (for example, due to organ transplants,  lung cancer, severe chest conditions or immunosuppressed conditions) and who have been notified by the NHS to isolate for 12 weeks.

Can employees staying at home to look after young children be placed on furlough? What about those on maternity, paternity and adoption leave and pay or shared parental rights?

Employees staying at home to look after young children are thought to be included in the furlough system in preference to being made redundant.

Employees eligible for statutory maternity pay or maternity allowance can claim up to 39 weeks of statutory pay or allowance as normal. The same principles apply for normal paternity, adoption or shared parental pay rights.

If the employer offers enhanced contractual rights these are included as wage costs that can be claimed through the scheme. The same principles apply to other types of family leave.

Employers with staff on maternity leave can reclaim 92% of SMP back in the normal way. (This is 103% if small employers’ relief applies). Employers cannot claim the 8% balance of SMP through the furlough scheme because the guidance does not yet say this is an option.

Switching between maternity and furlough

Some employees may wish to curtail their maternity leave to switch to furlough if that pays more than maternity (or adoption or shared parental) pay. If the employer and employee agree to furlough this seems to be permissible. Ending maternity leave early normally requires eight weeks’ notice but employees and employers can agree to waive or shorten the notice period. The maternity leave will then have ended although if the maternity leave is under a contractual scheme the employer can agree to resume it later on.

If the furlough leave then ends, leaving the employee faced with a total period that is shorter than their original maternity leave period, it should still be possible to take Shared Parental Leave until the child is one year old (or one year from the date the child was placed for adoption).

We have some staff who are struggling to deliver whilst working from home in a public funded role and manage family commitments so would welcome being furloughed.

If you have staff who are struggling to meet their professional responsibilities because of family commitments then you need to use the same principles as you’d use before any COVID-19 issues. Explore flexible working policies, paid/unpaid leave, carers leave etc.

Just because someone doesn’t want to do something or can’t do things for personal reasons doesn’t mean you as an organisation have to then accept and tolerate that. Even in these COVID-19 times.

It is up to you as an organisation who to furlough – whilst it needs to be done in agreement with your staff, furlough is not something staff can request from you.

Can we place employees who are shielding on furlough even if there is work for them to do?

 Yes, employers can place employees who are shielding on furlough even if there is work for them to do. If shielding employees can work at home, then they can continue to do this unless they become unwell. However, if there is no work to do at home, the shielding employees can be furloughed.

The subsequent government advice supplementing the COVID-19 job retention scheme has confirmed that the employers can claim the furlough grant for those shielding employees; they do not have to be placed on sick pay.

What if we want to bring employees back from furlough early (because other people get sick)? Do we lose the ability to claim three weeks of 80% and need to increase their pay for those weeks?

If employers bring employees back from furlough early because other people become sick the employer will lose the ability to claim three weeks of 80% and will need to increase the employee’s pay for those weeks.

Staff can be furloughed and return to work and then be furloughed again for as long as the scheme is operational. However, each furlough period must be for a minimum of three consecutive weeks. If an individual is only furloughed for one or two weeks and is then summoned back to working (either working from home or in the workplace) then the employer cannot claim under the scheme for the contribution to pay for that period.

If this continues can employees go on and off furlough?

Yes, if this continues employees can go on and off furlough. Employees must be furloughed for at least three weeks, so, employees can be moved in and out of furlough on a three week or longer basis.

Obviously if the employer’s business is one where employees have no alternative but to physically attend work on a regular or occasional basis, then longer rotations are better. This decreases the risks of spreading the infection.

Can you put someone on and off furlough to help keep the organisation going? i.e. 3 weeks on furlough and no work, then off furlough and back to work for a period, before going back onto Furlough for the min 3 weeks.

Yes – see above.

A staff member is pregnant (baby is due on 15th June) maternity leave due to start 1st June. Can we furlough them until 1st June? And claim the 80% grant and then what happens about their pay once their mat leave starts?

Yes you can furlough them. But then from 1st June usual contracted mat pay kicks in.

People with split roles. We have a staff member who has a dual role and this is detailed in their JD and was subject to a contract/role variation at the time. Can we furlough one of their roles and not the other?

If they just have one contract with you, and you use their JD, role description etc. to designate the split role then you can’t furlough part of their role.

If they have separate contracts for each role then you can furlough one role and not the other. That would mean 100% pay for their active role and 80% pay for the furloughed role. They must not do any work related to their furloughed role as this would be in breach of the rules. If you do this keep accurate records as the HMRC will be looking carefully at evidence etc.

We have two staff who are on a long term, open ended secondment with us from the Local Authority. Both staff are still on the Council payroll and have Council Ts&Cs. The Charity pay a quarterly re-charge to the Council to cover wage costs. If we want to furlough them – how would furlough apply here?

It would be up to the Council as they are the employer.

Can furloughed people volunteer for the trading company, which is owned by the charity from which they have been furloughed?

No – as they would be doing an activity which delivers a service or generates an income for the charity, the owner of the trading company.

Furlough and volunteering is a common query – the below is all based on current understanding

A furloughed member of staff cannot do any work for you, nor do any voluntary activity for you, that could in any way be considered as contributing to your organisations activities or services.

It would be difficult to see any activity that couldn’t be classed as being related to service delivery or income generation. For example, someone furloughed but then doing the accounts is contributing to the overall running of the organisation – it may not be directly related to service delivery or income regeneration but it is activity that ultimately facilitates the activities of your charity.

Furloughed staff could paint the building, tidy the garden, clean the fridge out etc. These are some activities some furloughed staff are volunteering to do.

But don’t get caught out. For example if you’ve furloughed a member of staff who is employed to do these tasks (caretaker, cleaner, handyperson) then they cannot volunteer to do them and neither can they supervise others volunteering to do them. But if you then have other furloughed staff (e.g. service delivery staff) coming in and doing such tasks as usually completed by the caretaker, cleaner, handyperson then you still technically have work for those furloughed staff – so should they have been furloughed in the first place?

Furloughed staff shouldn’t access work e-mails, reply to any general enquires about the organisation or even answer the phone if they were in the office painting it.

Calling our members – just a ring around. Can furloughed staff do this?

No – this would be classed as you delivering a service.

Even if tele befriending wasn’t part of your pre-COVID-19 service offer your organisation exists to support blind and partially sighted people – so anything you do which meets such an aim would be classed as a service.

For clarity look at your organisations charitable objects as outlined in the governing documents. Furloughed staff must do anything that contributes to delivery of those objects.

Several of our posts are funded via different pots – what’s the position about posts that are part public funded?

General point about public funds

Current guidance is that those organisations in receipt of public funding will continue to receive such monies from their public body. (National Lottery monies are being classed as public funds). Organisations in receipt of these public funds should contact their grant/contract manager and discuss with them what their approach is as a funder and what the options are in these times.

The lottery are being very flexible – allowing changes to delivery timescales, output variations and even changes to funded activity and original project activities – all as long as it is recorded properly by the organisation, discussed with the funding manager where they can be spoken to and that once we’re back into some normality then there will be an overall review. They are allowing people to simply pause all grant activity but we are hearing that they won’t extend project timescales past the end of the original grant terms. Latest updates on lottery funding are available here on their dedicated web-page.

We are hearing the councils, CCG’s, NHS etc. are also being very flexible – but again you need to speak to them direct and discuss/agree what services you can provide within the current restrictions.

Most funders are very likely to allow people to “catch up” on spend and activity when we’re out of this crisis – so you’re likely to be able to spend more money on more people doing more work. But talk to them now.

It might be better to suspend/pause all activity on some contracts but still do some activity on other contracts. Deciding this will come down to a combination of what your funders/contract holders approach is and what capacity you as an organisation are able to maintain with a staff team who are getting ill, juggling other issues etc.

About publicly funded posts

How an organization uses the public funds it receives to fund various posts is very much down to the organisation. Funding agreements with public bodies (councils, CCG’s etc..) very rarely stipulate they fund certain posts but focus more upon the nature, quality and volume of a range of agreed services. Organisations then design your staffing delivery team and own delivery functions to then deliver those services.

In the case of a part funded post it is the organisation who part fund the post using public funds and has to decide what to do, not the funder.

An organisation needd to look at their income (regardless of the source of those funds) and decide what services can be delivered and are acceptable to funders (see point above about talking to funders).

Organisations need to build the delivery team with the expertise required to deliver the activities that they can secure income for and with a sustainable financial model – just as in normal non COVID-19 times. This might see you furlough some staff and not others. The people you keep at work should be those with the skills needed to deliver against what services you are continuing to deliver – often your most broadly skilled/multidisciplinary (and best productive) staff will be these people.

 Can we suspend publicly funded work?

You can suspend any work you do – regardless of how it is funded. But before doing so you need to talk to your funders and agree how this is dealt with by them. They may hold the funding back until we’re through these issues and work can resume. This will help ensure that you have a clear case for furlough HMRC claims.

 

Disclaimer – We have to say this bit – just because its at the bottom don’t ignore it!

These resources/information have come from a number of sources. Visionary has not quality assured this information. You should treat any information as being intended for guidance only, and not as a substitute for professional advice. No responsibility for loss occasioned as a result of any person acting or refraining from acting can be accepted by Visionary.

If you want formal HR or legal advice then please contact us and we can help you identify qualified sources.

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