Furlough leave specimen agreement
Furlough leave- specimen agreement
Dear [Employee Name],
FURLOUGH LEAVE- CORONAVIRUS JOB RETENTION SCHEME
We are writing to you regarding the impact of the COVID-19 pandemic on [Name of Employer]. As you will be aware [following the recent announcement], the effect of the current restrictions and the wider pandemic is that the business cannot operate as usual. [Provide further details of why the business cannot operate as normal – for example, reduced staff, reduced hours or the business has been ordered to close].
As a result of this, we need to place employees on furlough leave (‘Furlough’) in accordance with the government’s Coronavirus Job Retention Scheme (‘CRJS’) [as an alternative to making redundancies]. If we do so, [Employer Name] can obtain a grant to cover up to 80% of employees’ salary up to a total of £2,500 per month per employee. The period of Furlough must be a minimum of three weeks to qualify for the grant but may be extended if necessary. The grant will cover the cost of wages [throughout the period of Furlough] OR [backdated to 1st March 2020], employer National Insurance Contributions and the minimum auto-enrolment employer pension contributions. Depending on whether you dismissed the employee before the CJRS was announced.
We therefore need to seek your consent to vary the terms of your employment contract (in accordance with this letter) and place you on Furlough from [Date]. OR We therefore need to seek your consent to treat you as having been placed on Furlough from the date your employment ended on [date in March when employment ended] and vary the terms of your employment contract in accordance with this letter.
Note: you must have been on the PAYE system on 28 February to qualify for the scheme.
FURLOUGH
This will be for an initial period of [length of initial period – between three weeks and three months] but may be extended [or shortened] as necessary, although it will not be less than three weeks, to ensure eligibility for the CJRS. The government has announced that the scheme will initially run until the end of May but will be extended if necessary.
What this means is that you will still be employed by [Employer Name] but you will not work during the period of Furlough. You agree not to attend the workplace or do any work for us.
To qualify for the CJRS, you cannot provide us with any services or do anything which generates revenue for us [although we may ask you to undertake training at home]. You may undertake unpaid volunteer work if you wish, although you should follow government guidance in doing so.
Note: employees who are on National Minimum Wage (NMW) are entitled to receive 80% of NMW during a period of furlough leave but must be paid NMW for any time spent undertaking training at home. If you are paid NMW, then consider including a note to this effect.
OPTIONAL PARAGRAPH
You may not carry out paid work for anyone else while on Furlough without [Employer Name]’s consent. If you do so, this will be treated as a disciplinary issue. If you undertakenew paid work without permission and this affects our eligibility to reclaim your wages under the CJRS, we reserve the right to ask you to repay any sums paid to you during Furlough. Notwithstanding this, if you already have a second job, you may continue to work for that employer.
The government has not yet released any guidance on whether a furloughed employee gettinganother job would affect the company’s entitlement to reclaim wages in respect of that employee. Please note that if the government subsequently confirms that entitlement will not be affected by additional paid work, refusing consent and/or reclaiming wages is likely to be viewed as unreasonable.
PAY
During the period of Furlough, [you will be paid 80% of your usual pay up to a maximum of £2,500 per month, excluding bonuses, fees or commission, as per the CJRS] OR [we will top up the government grant so you will receive your usual salary].
For salaried employees [This will be calculated as 80% of your gross monthly salary on 28 February 2020].
For employees whose pay fluctuates either [This will be the higher of 80% of your average earnings per month in the 2019/20 tax year or your earnings in the same month last year] OR if the employee has been employed for less than a year [This will be 80% of your average earnings per month since you started employment].
This will be subject to the usual deductions for income tax, national insurance contributions and pension contributions, and will be paid on the usual payroll dates as far as possible.
Employer NICs and the minimum auto-enrolment employer pension contributions will be paid in addition to the salary set out above and will be based on the reduced salary you are receiving during Furlough.
Note: only use if your employer is not topping up to full pay.
TERMS AND CONDITIONS OF EMPLOYMENT
In addition to the changes above, the following changes to your terms and conditions will apply during Furlough: OR [All other terms and conditions of your employment will stay the same during Furlough.]
[You will continue to accrue holiday at the usual rate while on Furlough] OR [Your annual holiday allowance will be reduced to the statutory entitlement of 28 days including PublicHolidays] OR [You will remain entitled to the statutory minimum of 28 days holiday including Public Holidays, but your additional contractual entitlement will be reduced to reflect the proportion of the leave year spent on Furlough, e.g. if you spend one month on Furlough means you will receive 11/12 of your additional contractual annual leave entitlement].
You may not take any holiday during Furlough. If this means you [are unable to take your full holiday allowance/ are unable to take your full statutory annual leave entitlement/ are unable to take at least 20 days annual leave] in this leave year, you may carry over the balance to be used during the next two leave years (after the leave year in which it should have been taken].
Note: The government has not yet released guidance on whether it is possible to take annual leave during furlough, and whether it should be paid at 80% or 100%.
Your employer should explain how any commission/bonus/employee reward scheme will operate, and also whether any additional contractual benefits will cease during Furlough (e.g. additional contractual employer pension contributions).
All your other terms and conditions will stay the same during Furlough.
TERMINATION OF FURLOUGH
Furlough will end at the earliest possible opportunity (although it will last at least three weeks) when either:
We very much hope that you will be able to return to work as normal when the scheme ends (or beforehand). However, if this is not going to be possible because of continued disruption to the business, we will consult with you at that stage.
Keeping in touch
Please confirm your personal email address and the best phone number to contact you on during Furlough. [You should send these to [your line manager] OR [the following email address: ]]. OR [Please include them when you return the signed copy of this letter].
Please check your email and phone/voicemail regularly during Furlough, in case we need to ask you to return to work at short notice or provide you with any updates. You are required to respond promptly [and within any specified timeframe] to any communications from [Employer Name].
If you agree to these changes, we need a formal record of your consent in order to place you on Furlough in accordance with the CJRS.
Please confirm your consent by signing and returning [a scanned] copy of this letter to [appropriate email address or address] by [date]. You should keep a copy of this letter as it amends your contract of employment.
If you have any queries, please do not hesitate to contact [Name] at [email address].
Yours sincerely,
………………………………
[Name and position]
I agree that my employment contract will be varied with immediate effect in accordance with the terms of this letter.
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