“Furloughed” does not mean “Laid off”

Employers should not confuse ‘furlough’ with ‘lay off’.  It could prove expensive.

‘Furlough’ is the technical phrase as announced on 20 Mach used by the government referring to payments made under the Coronavirus Job Retention Scheme .  ‘Lay off’ and ‘short time working’ are technical phrases referring to the employment contract.

Letters poorly drafted today may leave the employer exposed to significant claims for breach of contract paying the difference between normal pay and the government furloughed worker’s pay.  Employees might be understanding and grateful today, but claims might be brought years from now when we are back to normal and the normal workplace disputes arise.  With many employees, or for higher paid employees, this has potential to be an expensive mistake.

For today, therefore, if the existing employment contract does not give the employer the right to impose lay off or short time working, then agreement will need to be reached.  As the government alludes, negotiation may be needed.  That should not be too difficult: the choice for most, between keeping a job at 80% of normal pay (up to £2,500 per month) or being made redundant, may be easy and quick.  However, the document recording what is agreed may be simple and short but needs to be carefully considered.  There are dangers here.

For similar reasons, also do not confuse ‘isolation’ with ‘social distancing’.

Read about out Fixed Fee package to help in this crisis.

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