Once the Coronavirus job retention scheme ends can employers introduce their own private furlough scheme?
Employers can introduce a similar model themselves following the end of furlough. However, either the current contract of employment must allow for this, or the employer will be required to negotiate an agreed change to said contract. If this will affect a lot of employees, collective representatives or a union may have to be involved as well as individual agreements for the private furlough arrangement.
Employees may agree not to work for an extended period of time, and this may be on lower pay than the furlough scheme. However, the employer is going to have to fund this privately as there will be no government help towards furlough arrangements after the scheme ends. Private furlough may be attractive to employees as an alternative to redundancy, especially if they can work elsewhere during any ‘private’ furlough period. However, there will be extremely difficult situations to handle if some staff are chosen to work and some are asked to agree to private furlough.
Should redundancy and notice pay be based on normal pay or furlough pay?
Redundancy pay should be based on employees’ full normal salary rather than furlough pay. Notice pay generally can be based on either the contractual, or statutory minimum, notice period, whichever is the longest. Statutory minimum notice is essentially one week’s pay for the first two years of work followed by one week’s notice for every year worked up to a maximum of 12 weeks.