Furlough leave – What is it? How is it implemented?

By Farleys Solicitors LLP

02 Apr 2020

victoria-mitchell-farleys-sq.jpg

Furlough Leave is a word used to describe temporary “leave” or a “sabbatical” due to the special needs of an employer which may be due to economic conditions.

We are currently being asked to advise and assist many employers and employees as Furlough Leave is becoming used as a measure to help businesses ride out the economic crisis created by Covid-19.

The Coronavirus Job Retention scheme recently introduced by the Government provides grants to cover 80% of the salary of PAYE employees who would otherwise have been laid off during this current Covid-19 crisis. A key feature of the scheme is that employees must be on “Furlough Leave” rather than dismissed by the employer.  To be classed as on Furlough leave, an employee must be sent home by an employer, it is not available where the employee continues to work.

To claim under the scheme employers will therefore need to firstly select and designate affected employees as ‘furloughed workers’, and notify employees of this change. Changing the status of employees remains subject to existing employment law and, depending on the employment contract, may be subject to consent and/or negotiation.

What steps must an employer take to put employees on Furlough Leave?

Decide which employees to designate as furlough employees – there must however be a fair and lawful selection to avoid the risk of grievances and/or employment claims;

Notify those employees of the intended change – the wording of such letter/email should be carefully drafted so as to adhere to existing employment laws and achieve the required objective;

Consider whether it needs to consult with employees whether individually or in some cases employee representatives or trade unions (i.e. if there is 20 or more employees) – collective consultation may be required if 20 or more employees which has strict rules to be complied with to avoid claims. There may the possibility of using the special circumstances defence which we recommend you take advice upon.

Agree the change with the furloughed employees. Most employment contracts will not permit an employer to reduce an employees pay, provide them with no work and change their employment status without agreement and consultation and consent may therefore be required for which we can assist with.

Confirm the employees’ new status in writing. Ideally, the employer should advise how long it expects furlough leave to continue, however this may be difficult due to the current economic climate.  Employers may wish to put employees on furlough leave for an initial period, subject to review.

Submit information to HMRC about the employees that have been furloughed and their earnings through the new online portal via HMRC; and

Ensure that the employees do not carry out any further work whilst they are furloughed.

Can an employee request an employer to put them on to Furlough Leave?

An employee can request this but an employer does not have to agree.  It is an employer’s decision which employees to place on furlough leave if any.  It seems that it is also the employer’s decision whether to place employees on furlough leave or make them redundant.

Potentially redundant employees do not have a right to require their employer to place them on furlough leave as an alternative to redundancy however, it is hoped that many employees will see the new scheme as preferable to business closure and making redundancies.

It is currently unclear whether refusing to place an employee on furlough leave and making them redundant could amount to an unfair dismissal at the present time.

Does an employer have to top up the remaining 20%?

The COVID-19 guidance for employees currently states that “your employer could choose to fund the differences between this payment and your salary, but does not have to“.

Withholding 20% of an employee’s salary, will however, amount to breach of contract and unlawful deduction of wages unless the employee gives their consent.

A commonly held view at the moment is that it is expected that the majority of employees will consent since furlough leave is a better alternative than unpaid leave, lay-off, or redundancy.

If you require advice and/or assistance about Furlough Leave; the Coronavirus Job Retention scheme and/or are an employer that need helps with notifying and communicating with employees about the above or if you encounter difficulties with employees in this situation, please contact us on 0845 287 0939 or submit your enquiry online.

Farleys Solicitors LLP specialise in employment law & HR for businesses and employees. If you or your business requires HR & employment law advice and support in relation to the current Covid-19 / Coronavirus situation and/or in relation to any other specific area for example; contracts of employment, staff handbooks, absence from work, home-working, apprentices, recruitment, restructures, redundancies, lay-off; short-time working; disciplinaries, grievances, employee exits, settlement agreements; and Employment Tribunal claim or defence and representation.

Please note: the information contained within this article is correct at the time of writing. As the COVID-19 situation develops, guidance is subject to change and, while we will do our best to give you up to date information, it is always advisable to speak with a solicitor for specific advice.

Latest news

1

UK's pioneering Combat Air Flying Demonstrator is revealed Flying Combat Air Demonstrator

UK's pioneering Combat Air Flying Demonstrator is revealed

17 Jul 2025

2

A fresh brew for The Printed Cup Company The Printed Cup Company

A fresh brew for The Printed Cup Company

17 Jul 2025

3

Joe Diston from Beever and Struthers appointed to new Global IFRS leader for HLB International Joe Diston

Joe Diston from Beever and Struthers appointed to new Global IFRS leader for HLB International

17 Jul 2025

4

Louise Leyland promoted to director role at PWA Planning Louise Leyland And Paul Walton

Louise Leyland promoted to director role at PWA Planning

16 Jul 2025

5

Muller UK and Ireland to invest an extra £45m into Skelmersdale site The Skelmersdale Muller site

Muller UK and Ireland to invest an extra £45m into Skelmersdale site

16 Jul 2025

Background image for hub sign up block

LBV Hub

Leverage Lancashire Business View platforms

Post your news
Post your events
Post your offers
Build your network
Improve your SEO
Gain coverage in the magazine
Sign-up
Events
Lancashire Built Environment Conference 2025
BEC 315 X 315 Px
Networking
25 Sep 2025

Lancashire Built Environment Conference 2025

Blackpool Football Club, Blackpool, FY1 6HX

08:30 - 13:00

CMI Level 5 Project Management Course
UCLanAerialCampus.jpg.jpg
LBV Hub Seminars
21 Feb 2025 - 21 Feb 2026

CMI Level 5 Project Management Course

Preston Campus, Preston, PR1 2HE

08:00 - 17:00

CMI Level 5 Management and Leadership Course
UCLanAerialCampus.jpg.jpg
LBV Hub Seminars
21 Feb 2025 - 21 Feb 2026

CMI Level 5 Management and Leadership Course

Preston Campus, Preston , PR1 2HE

09:00 - 17:00

Preston Tech Connection: Web3 is Dead. Or is It?
July Longer Banner.jpg.jpg
LBV Hub Networking
29 Jul 2025 - 29 Jul 2025

Preston Tech Connection: Web3 is Dead. Or is It?

Society1, Coworking Space, Preston, PR1 3LT

18:00 - 19:30

Preston Freelancer Meet-Up: July
Longer July Banner.jpg.jpg
LBV Hub Networking
31 Jul 2025 - 31 Jul 2025

Preston Freelancer Meet-Up: July

Society1, Coworking Space, Preston, PR1 3LT

10:00 - 11:30

Advantage: AI – A Workshop for Business Leaders – August 14th
Navy--Event Tile.png.png
LBV Hub Seminars
14 Aug 2025 - 14 Aug 2025

Advantage: AI – A Workshop for Business Leaders – August 14th

Door4 Office, Burnley Wharf, Burnley, BB11 1JG

09:00 - 12:00

The Business Network Central & East Lancashire
LBV Header (24).png.png
LBV Hub Networking
21 Aug 2025 - 21 Aug 2025

The Business Network Central & East Lancashire

Mytton Fold, Langho, BB6 8AB

11:30 - 14:15

Morecambe Bay Walk
Walk.jpg.jpg
LBV Hub Awards
30 Aug 2025 - 30 Aug 2025

Morecambe Bay Walk

Arnside, CARNFORTH, LA5

09:30 - 14:00

Cumbria Business Expo 2025
https---cdn.evbuc.com-images-880461633-4862066883-1-original.20241022-110415.jpeg.jpg
LBV Hub Exhibitions
19 Sep 2025 - 19 Sep 2025

Cumbria Business Expo 2025

Carlisle Racecourse, Carlisle, CA2 4TS

09:00 - 15:00

Help to grow management course
Help to grow - barriers to growth.png.png
LBV Hub Seminars
26 Sep 2025 - 16 Dec 2025

Help to grow management course

Preston Campus , Preston , PR1 2HE

09:00 - 15:00

North West Business Expo 2025
https---cdn.evbuc.com-images-880456273-4862066883-1-original.20241022-105445.jpeg.jpg
LBV Hub Exhibitions
24 Oct 2025 - 24 Oct 2025

North West Business Expo 2025

Bolton Stadium Hotel, Bolton, BL6 6SF

09:00 - 15:00

Lancashire Business Day 2025
241122lbvlancashiredaylhp0647web
Networking
27 Nov 2025

Lancashire Business Day 2025

Burnley FC , Burnley, BB10 4BX

12:00 - 17:00

Advertise with us

Reaching 50,000 members, our print, digital and event platforms offer a fantastic way to raise your business profile and help you grow.

Find out more LBV122 Online Graphic
Subscribe now

Weekly news bulletin