8th April 2020

Furlough – Getting it right

It is a great initiative for businesses but beware of misinformation

There has been considerable attention given to the Chancellor’s assistance to employers in the current pandemic. Specifically, employers have been offered a grant where those employers adversely affected by the COVID-19 outbreak have had a downturn in work for their staff. The assistance available is where the employees that might otherwise have been subject to layoffs or even redundancy can be placed on “furlough”.

Furlough is a new concept under UK employment law. While the government have given some guidelines about how the scheme will work, there is a lack of clarity and that has led to a certain amount of misinformation out in the marketplace. While perhaps not as concerning as the kind of misinformation that the Corona virus was caused by 5G, it is not particularly reassuring for employers needing to make difficult decisions affecting their business in the most trying of circumstances.

As if that were bad enough, one of the few clear elements of the scheme is that the portal for the operation of the furlough grant (through HMRC) will not be available until the end of April. What that means is that the application for the grant cannot be made until then. As a result, the funds for the grant may not come through until at least the greater part of May.

The obvious issue is that the decisions that need to taken now to place employees on furlough must be made correctly otherwise the grant will not be available. However, an employer will not know that until much later when the portal is ready for applications but where the decision to place an employee on furlough will have already been made and implemented. So, the first you might hear that you have done things incorrectly will be at least a month or possibly even longer, and if things were not done properly in the first place, you will be left with the wages bill anyway with employees not working at all.

The important thing (as in most things affecting businesses at this time) is to get the right advice. At Buss Murton, we have been looking into the detail of the furlough process carefully. If you are considering this step with your business, then do get in touch and see how we can help you in this stressful period.

Alex Lee

Alex Lee