Coronavirus: Plans to use furloughed workers? Make checks first

Farmers looking for seasonal labour are being urged to think carefully about the practicalities of using furloughed workers and make sure they check any workers they want to take on are able to work for another employer.

The government has previously confirmed that employees who are furloughed may be able to seek alternative employment – including on British farms that are facing a major shortfall in migrant labour because of movement restrictions.

Furlough scheme opens

The government’s furlough scheme is now open for applications – employers can get help on how to claim online.

To claim, an employer must have:

  • Created and started a PAYE payroll scheme on or before 19 March 2020
  • Enrolled for PAYE online
  • Have a UK bank account

Employers will need their Government Gateway user ID and the password received when registering for PAYE online.

Any entity with a UK payroll can apply, including businesses, charities, recruitment agencies and public authorities.

Apprentices can be furloughed in the same way as other employees and they can continue to train while furloughed.

Last week, the government also agreed to extend its Coronavirus Job Retention Scheme until the end of June – a month longer than was originally announced.

See also: Coronavirus: Latest news and advice for farmers

The scheme, which allows businesses to furlough employees with the government paying 80% of their wages up to a maximum of £2,500, was originally open for three months and backdated from 1 March to the end of May.

But chancellor Rishi Sunak has extended this by a month following the government’s decision to extend lockdown by another three weeks. 

Transferable skills

Joe Spencer, partner in accountancy firm MHA MacIntyre Hudson, pointed out that farmers need to be mindful that furloughed staff may have to return to their jobs sooner than farmers would like. 

“Furloughed employees may have to return to their original jobs before the end of the picking season in September,” he said.

“Taking on new workers who require considerable training may therefore not be cost-effective.

“The best solution is probably to hire workers with strong transferable skills, such as manufacturing plant workers, where the nature of their current work stands them in good stead for fruit picking.”

Check contracts

Mr Spencer also highlighted the importance of checking that furloughed workers are not in breach of their contract by seeking alternative work.

The government guidance is that workers may undertake other employment while placed on furlough “if your contract allows”.

According to the Chartered Institute of Personnel and Development (CIPD), the independent professional body for HR workers, in many employment contracts there is either an express or implied term that the employee should not work elsewhere, so workers could be in breach of contract if they do apply for another job.

The CIPD suggests the safest course of action is for the original employer to agree in writing with the employee the nature and length of any other work that may be done while furloughed.

This will be helpful to a new employer who has a duty to complete a new starter checklist for HMRC, part of which – statement C – must be completed to say if the employee has another job.

The government’s online portal to enable employers to claim the cash grant which will fund wages for furloughed workers is now open. 

Contract issues when furloughing

Government guidance states that employers must confirm in writing to their employee that they have been furloughed and a record of this communication must be kept for five years.

According to CIPD, if there is no lay off provision in their existing contract the employer will need to agree with the employee that they are going to become furloughed because no work is available.

Most employees will agree to this as the alternative is dismissal by reason of redundancy (with the possibility of a delayed redundancy payment or no redundancy payment for employees who have worked for less than two years).

As normal employment laws apply when furloughing employees, equality and discrimination laws will apply.

It may help to select employees for furlough using a process like redundancy selection – for example, using objective criteria, such as a scores matrix based on skills, productivity and previous appraisals.

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