COVID-19: Can my employer insist I take a furlough and pay me 80% of my wage? (NI)
I work for a company that employs about 30 people. On Monday my employer told me his business had been badly affected by the COVID-19 outbreak and that there had been a sharp downturn in business. He said he had no option but to lay me off temporarily and told me I was going to get paid 80% of my wage under the Government “furlough” scheme announced on Friday 20th March 2020. Up to a third of our workforce has been laid off on this basis and some of the employees who continue to work have less service than me and are less qualified. I don’t understand why I was selected and they were not. I do have a contract of employment but there is nothing in it about lay off or furlough. Can my employer do this?
He has also told me that in determining what is 80% of my wage, the Scheme calculation may be made using only my basic pay. I earn a lot on commission – surely this is taken into account?
On 20th March 2020, the Government announced the Coronavirus Job Retention Scheme. This provides financial assistance for employers who are forced to lay off staff (called “furloughed workers”) due to the impact of the COVID-19 pandemic on their business. Under the scheme, the employer will be able to claim a grant of up to 80% of any furloughed workers wage – up to a cap of £2500 per month. The scheme is being backdated to 1st March 2020 and will initially last for three months but can be extended further. Your employer will recoup his payment to you from HMRC. From your summary, it appears this is the basis on which your employer is “furloughing” you.
The scheme makes clear that an employer can only designate an employee as a “furloughed” employee, subject to existing employment law and that employee’s contract. It doesn’t attempt to change the law or insert a new clause regarding furlough into an employee’s contract. Normally an employer cannot lay off an employee unless there is express provision in their contract of employment to this effect. If your contract includes a lay off or furlough provision due to lack of work, then your employer is entitled to exercise that right. If there is no such provision, then legally speaking, your employer cannot lay you off or furlough you if you do not agree.
However, if you do not, your employer may well make you redundant. There has been a reduction in his business and as a result it appears his requirement for you to carry out your work. Subject to a fair selection process, you could be dismissed for redundancy. You may well decide that being on furlough is a better alternative and agree to being designated as a “furloughed employee” in the circumstances. If you are not prepared to agree a furlough and your employer does not want to make you redundant and insists you go on furlough, you may have an action against him for unlawful deduction of wages or perhaps constructive dismissal. These are complex areas of employment law and you would need expert advice before taking any further steps.
You feel that you have been unfairly selected to be on furlough and other employees should been asked before you. Certainly, your employer would be expected to have a reasoned and fair process for selecting some employees for furlough and retaining others to work on their full salary. He may well have done so and you are entitled to ask him for full particulars of it. You would have been expected to be told and indeed participated in any such process. If you have been selected for furlough on a discriminatory basis (sex, marital status, gender, race, religion, political affiliation, disability etc.), then you may have an action against your employer for discrimination. Again, this is a complex area of law demanding expert advice before taking any steps.
Employers may, if they wish, make up the difference between the scheme’s 80% furlough contribution and the employee’s normal wage. Your employer does not appear to want to do this. The Government have not indicated at this time whether their 80% grant is based on gross or nett wages or should include commission or overtime payments. We expect them to clarify this soon. We cannot say therefore at the moment whether commission will be included in the calculation under the scheme.
Disclaimer: This blog contains general information about the legal topic discussed. It does not deal with every important topic nor cover every aspect of the topics with which it deals. It does not constitute legal advice, nor should you rely on it as legal advice. If you have any legal problems, please seek advice from a solicitor.