What was the eligibility criteria for the Government’s self-employment income support scheme?

The guidance is clear that furloughed staff must receive no less than 80% of their reference pay (up to the monthly cap of £2500).

Employers cannot enter into any transaction with the worker which reduces the wages below this amount. This includes any administration charge, fees or other costs in connection with the employment.

• Certain workers will become “furloughed workers”.
• Furloughed workers cannot carry out any work for their employer while designated as furloughed, or a linked or associated organisation but they can do voluntary work as long as they are not providing services for or generating revenue for the employer or a linked or associated organisation.
• A furloughed worker can be furloughed part time and work the rest of the time.
• The furlough period begins when the employee stops work, not when agreement is reached.
• If furloughed employees are expected to do online training while furloughed they must receive the National Living Wage/National Minimum Wage for the time spent training.
• Workers must be told of and agree to this change in writing. This written agreement must be kept for five years as part of the scheme. The guidance has confirmed that collective agreement reached between an employer and a trade union on furloughing staff is acceptable for the purposes of making a claim under the scheme.
• However it should also be noted that this is a change in status and pay (if pay is not being topped up) and therefore subject to the usual employment law rules on changing terms and conditions.
• Changes to the contract must be made by agreement with the worker and the government guidance is clear that to be eligible for the subsidy employers must document their communication with the employee on being furloughed.
• You must confirm in writing that an employee has been furloughed, but that the employee does not need to provide a written response. Please note that this is for the purposes of making a claim under the scheme. Any reduction in pay must be agreed in writing under normal employment law principles and failure to do so may result in Employment Tribunal claims. You should not rely on a term in the employment contract to effect this change. We can advise you on how to document this properly.
• Employers must also keep a record of the agreement for at least 5 years.
• If employers have collective bargaining arrangements in place, they must agree this change with the union in the usual way.
• Collective consultation obligations may be triggered if there are 20 or more employees that are proposed to be dismissed and re-engaged in order to effect the change to terms to be furloughed. You should take advice if you think this may apply.

You can rotate staff on furlough or flexible furlough.

One option is to make it clear in the letter agreeing to being furloughed that there is an open ended right to rotate and to be able to take them off furlough and bring them back and put them back on.

So the employer reserves the ability to rotate by building into the agreement, but only exercises it if it is permissible.

Rotation is quite key for employers who need to make a temporary reduction to their overheads but want to retain the skills base to call back when work picks up. Having furloughed staff return on a part-time basis may reduce the need to rotate.

It also helps in the employer being able to show that they are treating the workforce as fairly as possible and everyone is taking a reduction. Get in touch if you need help preparing the documentation for furlough that will permit rotation or flexible furlough.

Read more about flexible furlough and how this can be used as part of the CJRS.

Unfortunately, losses caused by pandemics are not often covered expressly under standard policies, as the risk has been difficult for insurers to price and understand.

Even where additional cover in respect of notifiable diseases has been purchased, it typically will not include Covid-19 within the range of diseases covered by the policy. If the policy includes a list of notifiable diseases, and which does not include Covid-19, it is very unlikely that cover will be available for pandemic-relates losses.

The most common types of covers that could be afforded by insurance policies for coronavirus-related losses and liabilities are traditional business interruption insurance, contingent business interruption insurance, liability insurance, as well as cancellation and abandonment insurance.

It remains the case that anyone who has symptoms, however mild, or is in a household where someone has symptoms, should not leave their house to go to work. Those people should self-isolate, as should those in their households.