Chancellor of the Exchequer Rishi Sunak has extended Britain’s Job Retention Scheme – known as furloughing – until the end of October
The Chancellor has extended the furlough scheme for four months and said Britain will continue to cover 80 per cent of workers’ wages during the coronavirus crisis.
Rishi Sunak revealed today that 7.5million British workers now have the state picking up the bill for 80 per cent of their salary up to £2,500 a month, or £30,000 a year.
The furlough scheme will not now finish at the start of July, but instead run until the end of October.
Despite speculation, the scheme will not be reduced to 60 per cent of wages but changes will allow part-time working.
We explain why the scheme has been extended and what it means for you.
Can my employer make me return to work part-time?
The details of how the furlough scheme will change to allow part-time working have not been released yet and won’t be known until the end of the month.
While furloughed you remain an employee and it is likely that you could be asked to return part-time.
Subject to existing employment rights, it is possible that an employer could make a furloughed employee come back part-time, even if they do not agree to a permanent change in their hours.
The Money Advice Service explains that staff can be asked to do ‘short-time working’, which involves reducing their hours each week, or ‘lay-offs’, where there is not enough work for them so they are asked to not come in or take unpaid leave.
However, it adds that employees contracts must permit this and not all do.
The Money Advice Services says: ‘Your employer can only lay you off or require you to go on reduced hours if your contract of employment allows it.
‘If not, your employer will have to negotiate a change to your contract. Typically, this will involve many members of staff and they or their union will have to agree to the new arrangement.
‘You should also check if your contract allows you to take on another paid job while you’re on reduced hours.’
Businesses, staff and unions will be keen to see such issues tackled in detail when the Chancellor reveals further information by the end of May, or there could be the risk of a wave of employment disputes.
My employer wants to end my furlough early can it make me come back to work?
The minimum length of time that someone can be furloughed is three weeks and the employee must agree to the furloughing.
Companies can theoretically call people back from furlough early, if business has picked up and they have work for them to do. They should have agreed this with the employee in their initial furlough agreement though.
Specialist HR law firm, Lewis Silkin, explains: ‘Employers are likely to want to reserve the right to call employees back from furlough if trading.’
If such an agreement was made and employee refuses to come back to work, they could be sacked. If there was no agreement, they may be able to claim they were unfairly dismissed.
What’s changing with the furlough scheme?
Furloughing workers is currently an all or nothing affair. A business that furloughs a member of staff is not meant to ask them to do any work whatsoever.
Until the end of July, the scheme will not change at all from this current status, but after that companies will be able to try to phase workers back in.
Firms will be expected to pick up some of the tab when they do this, easing the cost of furloughing for the taxpayer.
Mr Sunak said: ‘From August to October, the scheme will continue for all sectors and regions of the UK but with greater flexibility to support the transition back to work.
‘Employers currently using the scheme will be able to bring furloughed employees back part-time.
‘And we we will ask employers to start sharing with the Government the cost of paying people’s salaries. Full details will follow by the end of May.’
A gap in the scheme will also be plugged, with workers who started jobs and were paid under PAYE tax between 28 February and 19 March now covered by the scheme.
Can I be furloughed if I’m sick?
If you’re fallen ill and in the meantime your employer has had to shut down, you should first get statutory sick pay first, but can be furloughed after this.
Those who are self-isolating because of coronavirus can also be placed on furlough.
People who are ‘shielding’ and are vulnerable to potential severe illness caused by the coronavirus, can also be placed on furlough.
At the moment, employees can be furloughed from a minimum of three weeks up to three months, although the Government may look to extend that if needed.
What is furloughing?
The furlough scheme – officially known as the Coronavirus Job Retention Scheme – involves workers agreeing to be furloughed by their employer.
At this point they are not meant to work and the taxpayer picks up 80 per cent of their salary, up to a maximum of £2,500 a month.
The scheme was rushed in as Britain went into the coronavirus lockdown and the consumer economy was paused, with people told to stay home and businesses told to get staff to work from home or close their doors, unless they were deemed essential.
Companies could apply to the Government to take part in the job retention scheme and it has proved far more popular than expected, with some 7.5million employees now furloughed by almost a million businesses.
Employees need to agree to be put on furlough by their employer, who can then apply for the money to the Government. They cannot apply for it themselves.
Employers can choose to pay the remaining 20 per cent of people’s wages, although they are not obliged to do so.
Likewise, for those on more than £2,500 a month, they can choose to ‘top-up’ what they get to match or get closer to their salary.
People must continue to pay income tax and national insurance contributions while on furlough. Employers are not allowed to ask them to do any work though.
![EasyJet and rival airlines have grounded planes during the coronavirus lockdown, meaning that staff have either lost their jobs or been furloughed](https://i.dailymail.co.uk/1s/2020/05/11/09/28248892-8306845-image-a-1_1589185250755.jpg)
EasyJet and rival airlines have grounded planes during the coronavirus lockdown, meaning that staff have either lost their jobs or been furloughed
Why has the furlough scheme been extended?
The furlough scheme was initially due to run until the end of May and this has already been extended once to the end of June.
Today’s announcement provides further clarity for businesses and workers that they will contiunue to be supported through summer and early autumn and that the job retention scheme will pay 80 per cent of wages until the end of October.
It followed the Government’s coronavirus lockdown exit plan, which was published yesterday, and Prime Minister Boris Johnson’s speech on Sunday night, enocouraging more people to go back to work.
However, both the exit plan and speech lacked concrete details of when lockdown would be eased and instead relied on a measure of the coronavirus threat.
With the furlough scheme due to end in six weeks, businesses were concerned that they would not need all their staff if the country was still only in the early stages oif emerging from lockdown, and employees were worried they would soon lose their jobs.
A mass wave of redundancies would deliver a double whammy blow to the economy, as people found themselves struggling to find another job in lockdown and unable to pay mortgages, rent and bills.
I have been furloughed, can I go and find a temporary job to earn extra money elsewhere?
You can do other work to earn extra money while furloughed but you should check with your employer first.
There may be something in your contract that says you cannot do this, or that you have to officially ask if you can and they could say no. If you are struggling financially, make sure that you mention this in your request.
The official Government line is that if your existing employment contract allows then you are free to seek another job while on furlough and your 80 per cent furlough pay will not be affected.
Obviously, if your employer is topping up your furlough pay, then asking if you can do work elsewhere to earn extra money is a tricky issue.
Can I be furloughed if I’m on a zero-hour contract?
You can be furloughed on a zero-hour contract and also if you’re on a flexible contract, or are employed by an agency.
If you are on a zero-hour contract, which means you don’t necessarily earn the same amount each month, your employer should give you the 80 per cent of your average monthly salary since you started working.
That also applies to workers who have been employed for less than a year.
If you’ve worked for your employer for a year or more, you should receive 80 per cent of your average monthly salary, or 80 per cent of what you earned in the same month during the previous year – whichever is highest.
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