Furlough cut-off for new employees may cause difficulty for those employees currently on family leave
One of the major announcements was that the furlough / job retention scheme will close to new members on 30 June 2020.
After this date, employers will only be able to furlough employees who have already been furloughed for the minimum period of three weeks.
Therefore, the last date on which employers can furlough employees for the first time is 10 June 2020, to ensure their 3-week period expires by the end of June.
Although many of the announcements have been welcomed and are practical solutions to encouraging businesses to get their staff back into work, some have questioned whether the cut-off point is arbitrary and places certain groups at a disadvantage.
In particular those employees who are currently taking a period of family leave may be adversely impacted.
Maternity Action have announced that they had written a letter to the Chancellor calling for parents on maternity, shared parental or adoption leave to be exempted from the new cut-off date of 10 June 2020.
Under the furlough scheme it is possible for employees to be furloughed during statutory family leave, such as maternity, paternity, adoption and shared parental leave.
However, the requirement that the employer must be paying the employee at least £2,500 or 80% of salary each month still applies. This means that, where the contractual entitlement to pay during the family leave is less than that, the employer may not be able to claim under the scheme.
Importantly, most employees on statutory family leave still receive the only the minimum statutory payments, which is less than the 80% pay requirement, and as a result, their employer may decide not to furlough them prior to the cut-off date in order to avoid having to increase their pay during the family leave from the statutory minimum.
Those employers who do not already pay enhanced pay (during family leave), could increase the contractual entitlement to the minimum level for reimbursement, but it is possible this could be regarded as an abuse of the scheme.
Further, where a woman started the unpaid part of her additional maternity leave on or before 28 February 2020 , or before 1 March 2020 (if the second Treasury direction applies), she will not be able to be furloughed until the date when her maternity leave was due to end. This may of course be after the 10th June.
The letter from Maternity Action states that the charity has received calls from women on maternity leave (and those on other family leave) whose workplaces are closed, and whose colleagues are furloughed, who fear that, if their maternity leave ends after 10 June 2020 and their workplace has not fully reopened, that they will not be able to be furloughed and so will be made redundant.
Maternity Action believes, probably quite rightly, that a significant number of new parents and adopters are likely to be in this situation. It could quite reasonably cause unfairness and detriment at a time of other significant challenges.
Employers should ensure they are, even more than ever, communicating with all their staff, and making sure they don’t forget about staff who may not be working due to being on family leave, rather than being furloughed or working.
Employers should review how they are going to retain the position for those on family leave, and whether the new cut-off date impacts the ability to furlough staff already on leave. A careful look at the dates will be required.
Anyone on family leave should contact their employer and ask them for clarification and updates on how they are going to be dealt with as the furlough / job retention scheme gradually winds down its support over the next few months and this is particularly important with the cut-off date only days away.
Source: Maternity Action
We've written to Chancellor @RishiSunak to call for an exemption to the 10 June #CJRS cut-off date, for new mothers still on maternity leave on 10 June, who will otherwise be denied access to the CJRS even if all their fellow employees are still furloughed.#ukemplaw #HR pic.twitter.com/WiPzrSYfBJ
— Maternity Action (@MaternityAction) June 3, 2020
This article was written and researched by Albert Bargery, Solicitor at our Isle of Wight Office. Albert advises employers and employees on the Isle of Wight and throughout the UK.
You can contact Albert by email:firstname.lastname@example.org
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