International Labor and Employment Law

New Ways of Working

By Béatrice Pola and Alexandra Stocki on Posted in Uncategorized

Beatrice Pola and Alexandra Stocki are contributing authors to IEL’s (International Employment Law) “New Ways of Working” resource page that explores and keeps track of key legal and compliance considerations for multinational employers as new ways of working become increasingly embedded as the pandemic begins to recede.

On the France-specific page, Beatrice, Alexandra and Rachida address timely questions concerning remote work, return to work and vaccinations, health and safety, and unions and/or work counsels.

To access, please click here.

Why the EU Commission’s Gig Economy Proposals Will Not Meet French Expectations

By Alexandra Stocki on Posted in Uncategorized

Alexandra Stocki, French & EU Employment Group partner, recently published an article titled “Why the EU Commission’s Gig Economy Proposals Will Not Meet French Expectations” in IEL (International Employment Lawyer).

This article discusses a draft proposal directive which aims to improve working conditions in platform (contractual/gig economy) work. This proposed directive would ensure that people have or can obtain the correct employment status in light of their actual relationship with a digital labour platform resulting in these workers being classified as either employees of the platforms or as independent workers.

To access the full article, please click here.

Five Questions for Employers to Ask Before Metaverse Working

By Alexandra Stocki on Posted in Uncategorized

Alexandra Stocki, French & EU Employment Group partner, recently published an article titled “Five Questions for Employers to Ask Before Metaverse Working” in IEL (International Employment Lawyer).

This article addresses work performed within the metaverse (Mark Zuckerberg’s “embodied version of the internet”) and the evolving employment related legal concerns.

To access the full article, please click here.

Employment Law: Presidential Elections Part 2

By Nicolas Léger on Posted in Uncategorized

Labor law is not central to the 2nd round campaign. The great opposition between Marine Le Pen and Emmanuel Macron is on pensions. Marine Le Pen is opposed to any increase in the current legal retirement age (62). The candidate of the Rassemblement national (RN) defends a legal retirement age of 60, for employees who worked before 20 and for forty years. Emmanuel Macron, on the other hand, wants to raise it to 64 or 65 and is still considering a broader reform, which could give rise to a referendum. The pension question might well be a key to the 2nd round of the election.

Besides this, Marine Le Pen still carries the idea of a national preference. Her program plans that the access of foreigners to any public or private employment, to the exercise of certain professions, economic or associative activities, functions of professional or union representation, would be fixed by law. Marine Le Pen clearly reserves the right to prohibit, by a simple law, any type of employment for foreigners in any sector of activity. Such a provision would most certainly be deemed contrary to the constitutional principle of equality, as well as to EU regulations. Before any adoption, such a provision would therefore require a modification of the constitution and of European commitments. Such a provision if adopted, would necessarily impact the activity of many French economic sectors.

Marine Le Pen refers from time to time to the need to make labor law more flexible. However, she usually does not specify her thoughts or give concrete examples. Such a statement is likely more of a slogan than an element of her program.

New Work Councils Roles Further France’s Climate and Resilience Law

By Béatrice Pola on Posted in Uncategorized

Béatrice Pola, French & EU Employment Group partner, recently published an article titled “New Work Councils Roles Further France’s Climate and Resilience Law” in IEL (International Employment Lawyer.)

This article addresses Corporate Social Responsibility (CSR) and recently strengthened legal obligations companies must adhere to. It also discusses some of the options that companies and consultancy firms are now offering to quantify the impact of the Climate Law and to help companies implement their CSR policies.

To access the full article, please click here.

Employment Law: Presidential Elections

By Nicolas Léger on Posted in Uncategorized

Labor law is not at the heart of the French presidential campaign, which is rather unusual. The latest major reforms, initiated under the presidency of François Hollande and then extended by the “Marcon” ordinances of September 22, 2017, seem to lead to an exhaustion of legislative inflation in this area. The overhaul of the organization of social dialogue, collective bargaining and the predictability of labor relations have considerably reformed labor law. There is no longer any political or social space for further reform.

Despite the uncertainties resulting from the war in Ukraine, the candidates are counting on a continuation of the economic growth that followed the end of the confinements and, probably in response to the social movements (yellow jackets), propose to strengthen the profit-sharing schemes.

  • Retirement

Emmanuel Macron and Valérie Pécresse propose an increase in the legal retirement age to 65. The main consequence – and objective – of this measure would be to significantly increase the working population. For the outgoing President, this proposal is part of a certain continuity with regard to his initiatives in terms of further economic development, and support for companies towards growth. This systemic reform, initiated during the mandate, had indeed been suspended in the light of the health crisis. Although it is not yet time to assess the consequences of such a measure in figures, pension funds were concerned as early as 2021 about the postponement of the retirement age in view of the foreseeable increase in claims (with regard to risks related to occupational diseases and accidents at work). Such an increase would affect the employer (additional payment to be made to the social security regime in case of occupational disease / work accident and protection against the dismissal for the employee). In addition, employers would have to redefine their HR practice, by creating favorable conditions for older employee to remain in employment. Please note that employers must negotiate on an annual basis on “quality of life at work” with the unions. The increase of the retirement age would also most certainly result in an increase of claims for discrimination based on the age, as regards dismissal, salary increase etc.

Finally, with regard to Valérie Pécresse’s program, she proposes to allow workers freely to combine employment and retirement, on an unlimited basis.

  • Flexibility

Despite a major pandemic episode that has led companies to make massive use of teleworking, the flexibility measures proposed by the main candidates do not address the new ways of organizing work. On the other hand, both the outgoing President and the candidate Valérie Pécresse propose to liberalize the monetization of working time. The candidate of Les Républicains (liberal party) proposes to open the “possibility of converting the RTT into salary, without charge and without limit”, while Emmanuel Macron proposes a device of “universal savings-time account”.

  • Equality between women and men

This subject was a “major cause” of Emmanuel Macron last five-year term, which explains why it is not repeated.

The Socialist candidate, Anne Hidalgo, proposes to establish as a rule “the presence of employees in remuneration committees”. The program thus presented does not detail a possible mechanism for employee representation in the company’s decision-making bodies on remuneration. The desire to fight against the large wage gaps nevertheless led the Socialist candidate to propose the introduction of a bonus/malus system directly linked to employers’ contributions with regard to the sharing of added value.

  • Employee profit-sharing

Promoting the development of value-added sharing mechanisms also stands out as a measure likely to have strong impacts on companies. Emmanuel Macron proposes to make mandatory, for companies that pay dividends, participation or profit-sharing schemes or the payment of an exceptional purchasing power bonus. While participation is mandatory for companies with at least 50 employees, profit-sharing and the payment of the so-called “Macron” bonus are optional mechanisms. With regard to the exceptional purchasing power premium, the conditions were first relaxed. From now on, the outgoing President proposes to triple the amount.

  • Wage increases

At the heart of the presidential campaign, purchasing power is erected as the main concern of the French by the presidential candidates. This concern is correlated by proposals for wage increases. Indeed, Anne Hidalgo proposes an increase of 15%, while Valérie Pécresse proposes an increase in net wages of 10% in 5 years for all employees who earn less than € 2,800 net per month.

 

IFLR European In-House Counsel Summit

By Béatrice Pola on Posted in Uncategorized

Proskauer is a proud sponsor of the IFLR European In-House Counsel Summit taking place virtually on February 9-10, 2021. This conference will cover developments in the UK and European capital markets, M&A, legal technology, corporate sustainability, Brexit, competition law, and the global impact of COVID-19.

On day two of this event Béatrice Pola, Partner in the French & EU Employment Group in our Paris office, will present on a panel titled “Employment Law and the Future of the Workforce.” As companies adapt to the new reality of working from home employers have had to face situations unfamiliar to them until recently including how to hire and train new employees online and how to manage a team that may be split between the office and telecommuting.

During this timely discussion Béatrice will address the impact of remote working on employment law and employment contracts in France. She will also discuss the rise in telecommuting and some of the differences encountered working from home during normal circumstances versus during a crisis such as the COVID-19 global pandemic.

In addition, Béatrice will provide guidance on how to equally manage employees who have returned to the office and those who continue to work remotely, how to maintain a healthy work-life balance, and how to find innovative solutions to unprecedented remote situations.

For more information on this conference, or if you would like to register to attend, please click here.

Overview of the UK Coronavirus Job Retention Scheme

By Kelly McMullon on Posted in Coronavirus

The UK Government has published further guidance and The Coronavirus Act 2020 Functions of Her Majesty’s Revenue and Customs (Coronavirus Job Retention Scheme) Direction (the “Direction”) in relation to the Coronavirus Job Retention Scheme (“CJRS”). The Direction is available here and the guidance is available here, here and here. This blog post covers similar ground to, and updates, the prior blog post on this topic.

What is the CJRS?

By way of reminder, the CJRS is a government scheme set up to support UK employers who have been affected by the coronavirus. Under the CJRS, UK employers are able to obtain a grant equal to the lower of 80% of the wages or £2,500 per month per furloughed employee plus the associated employer National Insurance contributions and minimum automatic enrolment employer pension contributions (if payable) on the subsidised wage.

The CJRS was backdated so that it commenced on 1 March 2020 and was initially expected to run until the end of May. However, it has now been extended until the end of June and could be extended again, if necessary.

Which employers are covered?

The CJRS is open to all UK employers who have a PAYE payroll scheme and have a UK bank account.

Which employees are covered?

Eligible employees can be employed on any type of contract, including full-time and part-time contracts, agency worker contracts and flexible or zero-hour contracts.

Employees must have been on their employer’s PAYE payroll on or before 19 March 2020 and notified to HMRC on an RTI submission on or before 19 March 2020. The date stated under previous iterations of the guidance was 28 February 2020.

To be eligible, when on furlough, an employee can not undertake any work for their employer, so employees who simply reduce their hours will not be covered. However employees can engage in certain training and volunteer work for the employer. In addition, if their contract allows, employees can work for a different employer.

In addition, office holders (e.g. company directors), salaried members of LLPS, and certain workers could also be entitled to a grant.

How should I place an employee on furlough?

Normal employment rules and protections apply in terms of placing an employee on furlough. For instance, employers will need to discuss the changes with employees and seek their agreement to change the employment contract. Employers must confirm in writing that an employee has been furloughed. The Direction states that the employee and employer must agree in writing. The guidance states that an employee need not provide a written response, but there does need to be a written record of the communication/s that should be kept for 5 years.

The guidance for employees notes that if an employee refuses to be furloughed then the employee could be at risk of redundancy or termination of employment, subject to the normal rules and protections.

If the employer is selecting employees to be furloughed, then normal rules in relation to equality and discrimination apply and employers will need to consider any selection criteria accordingly. Employers should also consider if collective consultation obligations are triggered.

Note that, employees must be placed on furlough for a minimum of 3 weeks, but need not be furloughed for the entire period.

What happens to employees on sick leave, who are shielding in line with public health guidance or are dealing with caring responsibilities?

If an employee is:

  • on sick leave or self-isolating: the employee should get statutory sick pay whilst on sick leave or self-isolating. The Direction indicates that an employee can be furloughed after their entitlement to statutory sick pay has ended. However, the guidance states that if employees are off sick and an employer wants to furlough them for business reasons, the employer can;
  • shielding in line with public health guidance: the employee can be placed on furlough but they should speak to their employer about this;
  • dealing with caring responsibilities: the employee can be placed on furlough, e.g. if an employees has childcare responsibilities.

What happens if a furloughed employee becomes sick?

Furloughed employees must be paid at least statutory sick pay but the employer can choose to keep them on furlough at their furloughed rate or move them onto statutory sick pay. In practise, that will mean employers are likely to keep employees as furloughed.

What happens to employees who have already been made redundant?

If an employee was made redundant or stopped working after 28 February 2020 but prior to 19 March 2020 (subject to the employee being on payroll and notified to HMRC on an RTI submission on or before 28 February 2020), then an employer can rehire them and then designate them as a “furlough worker” instead.

Does being placed on furlough, impact an employee’s right?

Termination/Dismissal – Employers can still make employees redundant while on furlough or afterwards but an employee’s rights, including their right not to be unfairly dismissed (if applicable) and their redundancy rights (including to redundancy pay), are unaffected.

Family Leaves – The normal rules on statutory maternity pay, paternity pay and shared parental pay apply. Any enhanced contractual pay an employee is entitled to could be claimed through CJRS.

Holiday – Employers will want to carefully consider how holiday is managed. Furloughed employees will continue to accrue leave as per their contract. Holiday can be taken whilst on furlough and employers can also require that employees take certain holiday days whilst employees are on furlough. If holiday is taken (including if bank holidays are usually taken as leave), an employee will be entitled to be paid at their normal rate. The guidance notes that this policy on holiday pay is being kept under review.

How is an employee’s salary calculated?

HM Revenue and Customs (“HMRC”) have created a specific page to assist employers in working out how to calculate the grant, including a calculator (see link).

Broadly, in order to calculate 80% of wages:

  • for employees whose pay does not vary, the employee’s actual gross salary from their last pay period before 19 March 2020 should be used.
  • for employees employed for a full year but whose pay varies, then the amount will be the highest of: (i) 80% of the gross salary the employee earned in the equivalent month last year; or (ii) 80% of the average of the employee’s gross monthly wages for the 2019 to 2020 tax year.

If the 80% amount exceeds £2500 per month (equating to £30,000 per year or £576.92 per week), then the capped figure should be used instead.

The guidance sets out that an employee’s wages for the purposes of the calculation should include: regular wages, non-discretionary overtime, non-discretionary fees and non-discretionary commission payments. Conversely, any discretionary payments should not be included, nor should non-cash payments and non-monetary benefits in kind and salary sacrifice schemes that reduce an employees’ taxable pay. Employers should however be mindful that the direction also states that payments to be included in the calculation of wages should not vary because of relevant matters (e.g. contributions made by the employees to the performance of the business or any duties of employment) and also should “not [be] conditional on any matter”.

Employers can top up salaries if they wish.

An employer can also claim for national insurance contributions (for the wage claimed from HMRC) and mandatory pension contributions.

How does the employer access the money for furloughed employees?

Employers calculate their claim and should submit it through the online portal. This portal was opened on 20 April 2020 and in the first day alone over 180,000 claims were made by businesses with 1.3 million employees reported as being furloughed. It has been reported that it takes 6 days from submission for employers to receive the grant.

If the employer is eligible for a grant, the grant will be paid to the employer’s UK bank account.

What happens when the CJRS ends?

CJRS is currently open for at least 4 months through to at least 30 June 2020. The Government will keep the scheme under review and may extend it further.

At the end of CJRS, the employer will need to make a decision on whether the employee returns to work or is made redundant. Employers may also want to consider implementing and agreeing a transitional period in getting employees back into work.

Will the Direction and/or guidance be updated again?

It is likely that the Direction and/or guidance will be updated again given the inconsistencies that exist currently, so watch this space.

Proskauer’s cross-disciplinary, cross-jurisdictional Coronavirus Response Team is focused on supporting and addressing client concerns. Visit our Coronavirus Resource Center for guidance on risk management measures, practical steps businesses can take and resources to help manage ongoing operations.

The French Government Responds to COVID-19

By Alexandra Stocki, Nicolas Léger and Yasmine Tarasewicz on Posted in Coronavirus

COVID-19 Q&A Partial unemployment

Confronted with the outbreak of the COVID-19, in order to avoid massive contract termination, employers rely on the possibility to use the French partial unemployment scheme. Please note that the hereunder information is likely to be amended and adapted in accordance with current legislative and regulatory developments.

Partial unemployment scheme

Question 1: What is partial unemployment?  

Partial unemployment is a solution available to private companies dealing with temporary difficulties, whatever their workforce or sector of activity is.

This scheme enables compensation to be paid to employees for their loss of income due to:

  • either the reduction of their working hours below the legal (e. 35 hours per week), conventional or contractual working time,
  • or the closure of the establishment.

The State helps employers to finance this compensation.

Question 2: What are the conditions to benefit from the partial unemployment scheme?

The company’s difficulties must originate from one of the five (5) conditions listed below:

  • the economic situation;
  • difficulties in the supply of raw materials or energy;
  • a disaster or bad weather of an exceptional nature;
  • the transformation, restructuring or modernization of the Company;
  • any other circumstances of an exceptional nature.

The Ministry of Labor seems to consider that companies could benefit from partial unemployment on the basis of ‘other exceptional circumstances’.

Please find hereafter, a detailed table summarizing examples of qualifying cases for partial unemployment scheme.

In the context of the current health crisis, the main justifications for the use of partial unemployment would be, in the following order of priority:

  • Administrative closure of the establishment,
  • Decrease in activity due to the epidemic,
  • Impossibility to implement preventive measures required for the protection of employees (telecommuting, barrier gestures, etc.).

Question 3: How long is the use of the partial unemployment permitted?

In regular times, partial unemployment authorization is granted for a maximum period of 6 months. However, this duration was extended to 12 months because of the present crisis. It may be renewed if certain commitments are made by the employer (such as maintaining employees in service for up to twice the period of authorization or setting up of specific training actions for employees placed in partial unemployment).

Question 4: Which employees are eligible?

Qualifying employees Non qualifying employees
All employees are entitled to benefit from this scheme, including:

  • Part-time employees,
  • Employees still on their trial period,
  • Temporary employees (if the establishment to which these temporary workers have been working has placed its own employees in partial activity).
  • Employees whose working hours are determined on the basis of a fixed annual working time in days or hours.
  • Interns,
  • Sales representatives (“VRP”),
  • Employees with a French law employment contract working on sites located in third countries.

Question 5: Can partial unemployment be applied to certain activities or does it have to apply to the whole company or establishment?

The partial activity can concern an entire establishment or part of it: production unit, workshop, department, team in charge of carrying out a project, etc.

Question 6: Can partial unemployment be compulsory for protected employees? 

Due to the current health crisis, partial unemployment is compulsory for protected employees as well, without the need to get their explicit agreement as long as partial unemployment affects all employees of the company, establishment, department or workshop to which the concerned staff representatives are assigned or attached.

Question 7: How to apply for the benefit of partial unemployment? What are the deadlines for processing the application?

The transmission of the request of partial unemployment requires prior subscription to the DIRECCTE secure website (https://activitepartielle.emploi.gouv.fr).

The employer must provide:

  • the information necessary for its identification;
  • the name of the person authorized to proceed with this request;
  • an e-mail address.

This prior subscription and membership gives the employer access to the filing of his dematerialized application for partial unemployment.

With regard to requests made in the context of the current health crisis, the online application must specify:

  • the reasons justifying the need to put employees on partial unemployment (exceptional circumstances and Covid-19);
  • the detailed circumstances and economic situation giving rise to the request;
  • the foreseeable period of underemployment (which may extend until June 30, 2020 from the first request);
  • the number of employees concerned;
  • the forecast number of hours of unemployment.

Until December 31, 2020, the time limit for express acceptance of requests for authorization is reduced from 15 to 2 days. Consequently, in the absence of a response within two days, the authorization is tacitly granted.

Employers are allowed:

  • to collect the opinion of the CSE after the request and transmit it to the administration within a maximum of two months from the request;
  • to send their request within 30 days of the placement of employees in partial activity.

Multi-establishment companies will be able to apply for partial activity in one go.

Question 8: Can partial unemployment be effective before the date on which the request is sent?

In principle, the request for authorization for partial unemployment must be made before the scheme being effective. However, for all requests placing employees in partial unemployment since March 1st, 2020:

  • a 30 day period is now granted to employers to submit their request for partial unemployment in case of exceptional circumstances,
  • the opinion of the Economic and Social Committee can be sent within two months of the request for prior authorization.

Partial unemployment compensation

Question 9: Which hours are eligible for compensation? 

The number of hours justifying compensation corresponds to the difference between:

  • the legal working hours (e. 35 hours per week), over the period in question (or, when it is lower, the collective working hours or the ones stipulated in the employment contract), an
  • the number of hours actually worked over the aforementioned period.

For instance, if an employee usually works 39 hours per week with 4 hours of overtime, he will only be compensated on the basis of the 35 hours. The 4 hours between the 36th and 39th hour are considered to be off work but do not give entitlement to partial unemployment allowance or any compensation by the employer.

Question 10: How is the employee paid?

Employees are entitled to a compensation up to 70% at least of their previous gross hourly remuneration (i.e. approximately 84% of the net hourly remuneration). However, some branch collective bargaining agreements require a compensation rate higher than 70% (for instance the Syntec collective bargaining agreement or the Metallurgy one).

The hourly rate shall not be less than 8.03€ (except for employees on an apprenticeship professionalization contract, and for par-time employees when their remuneration is below the minimum wage).

In any event, hours worked beyond the legal duration (or, when it is lower, the collective working hours or the ones stipulated in the employment contract) do not give entitlement to a compensation allowance.

Question 11: What is the calculation basis for the allowance?

Practically speaking, the remuneration (gross) taken into consideration shall be the one of the month preceding the leave. The calculation basis is the one-tenth rule referred to for calculating paid leave indemnity.

For instance, the following elements should be included:

  • the gross base salary;
  • the wage supplements (overtime hours payment, etc.);
  • paid leave indemnity of last year;
  • seniority bonuses at the rate in force during the reference period;
  • attendance bonuses paid monthly;
  • target bonuses when they are awarded on the basis of the employee’s personal results (they should then be prorated);
  • advantages in kind;
  • lump-sum reimbursements of expenses.

Question 12: What is the tax and social regime of partial unemployment compensation allowance?

Partial unemployment compensation allowances are not qualified as salary and are exempt from taxes and social security contributions up to 70% of the employee’s gross remuneration.

Nonetheless, these allowances are subject to:

  • both CSG and CRDS contributions, respectively up to 6,20% and 0,50%,
  • withheld income tax.

Question 13: How is the employer reimbursed?

The allowance will be reimbursed in full (jointly by the State and the unemployment insurance organization) up to a ceiling equal to 4.5 times the hourly rate of the minimum wage, i.e. €45.68 in 2020, whatever the size of the company.

Below the aforementioned upper limit, the employer has no remaining expenses. On the contrary, above this ceiling or in the event of an increase in the rate of 70%, the employer bears the financial burden of the differential.

This amount will be multiplied by the number of hours off work up to a maximum of 35 hours per week, unless the employment contract provides for a lower number of hours.

The non-worked hours are compensated up to a limit of, currently, 1,000 hours per year and per employee (i.e. around 6.5 months for a full time employee). This limit should be increased by the government in the coming days.

To be reimbursed the allowances paid to employees in partial unemployment, the employer must submit an online request for partial activity allowance every month on the site (activitepartielle.emploi.gouv.fr/aparts/).

Effects on the employment contract

Question 14: What are the effects on the employment contract? On a staff representative term of office?

During partial unemployment, the employment contract is suspended but not terminated. Consequently, during this period, employees do not have to remain at the disposal of their employer or comply with his instructions. Employees continue to acquire paid leave for the totality of the hours off work.

Partial activity has no impact on the mandate of the staff representatives, which continues even if the employment contract is suspended.

Question 15 : Can the employee carry out another activity during the periods not worked under a partial unemployment scheme?

Employees will only be allowed to carry out such an activity if their employment contract does not include an exclusivity clause: they shall then inform their employer of:

  • their decision to exercise a professional activity with another employer and,
  • the expected working time. Indeed, working for several employers shall not release employees from their obligation to comply with legal provisions on working hours.

When there is a contractual exclusivity clause, employees need prior waiver from their employer.

The employee will be able to cumulate the indemnity in accordance with partial unemployment regulations and the indemnity due for the other employment.

In any case, the employee will remain subject to his obligation of loyalty and therefore cannot work for a competitor of his employer, or on his own account on a competitive activity.

***

Proskauer’s cross-disciplinary, cross-jurisdictional Coronavirus Response Team is focused on supporting and addressing client concerns.  Visit our Coronavirus Resource Center for guidance on risk management measures, practical steps businesses can take and resources to help manage ongoing operations.

Further Guidance Published on UK’s Coronavirus Job Retention Scheme

By Kelly McMullon on Posted in Coronavirus

Further to our prior blog post available here, the UK Government has published more detailed guidance on the Coronavirus Job Retention Scheme (“CJRS”). That guidance is available here and here. Here are some of the key questions the updated guidance now answers.

What is the CJRS?

The CJRS is a government scheme set up to support UK employers who have been affected by the coronavirus. Under the CJRS, UK employers are able to obtain a grant equal to the lower of 80% of the wages or £2,500 per month per furloughed employee plus the associated employer National Insurance contributions and minimum automatic enrolment employer pension contributions (if payable) on the subsidised wage.

The CJRS will last for at least a three month period commencing on 1 March 2020 and is expected to be up and running by the end of April. Claims can be backdated to 1 March if applicable.

Which employers are covered?

The CJRS is open to all UK employers who have a PAYE payroll scheme (provided it was created before 28 February 2020) and have a UK bank account.

Which employees are covered?

Eligible employees can be employed on any type of contract, including full time and part time contracts, agency worker contracts and flexible or zero-hour contracts. Affected employees must have been on the payroll on 28 February 2020 so any employees hired after this date will not be covered. Employees that were made redundant after 28 February 2020 and have since been rehired by their employer.

To be eligible, when on furlough, an employee can not undertake any work for their employer, so employees who simply reduce their hours will not be covered.

What happens to employees on sick leave, who are self-isolating for other reasons or are shielding in line with public health guidance?

If an employee is:

  • on sick leave or self-isolating: the employee should get statutory sick pay whilst on sick leave or is self-isolating and can be furloughed after this;
  • shielding in line with public health guidance: the employee can be placed on furlough but they should speak to their employer about this.

What happens to employees who have already been made redundant?

If an employee was made redundant after 28 February 2020, then an employer can rehire them and then designate them as a “furlough worker” instead.

How is an employee’s salary calculated?

For employees whose pay does not vary, the employee’s actual gross salary as of 28 February should be used to calculate 80%.

For employees employed for a full year but whose pay varies, then the amount will be the higher of: (i) the salary the employee earned in the equivalent month last year; or (ii) an average of the employee’s monthly earnings from the last year.

If employed for less than a year, employees will be entitled to an average of their monthly earnings since they started work.

Bonuses, commissions and fees are not included as part of an employee’s monthly earnings.

Employers can top up salaries if they wish.

Does being placed on furlough, impact an employee’s right?

Employers can still make employees redundant while on furlough or afterwards but an employee’s rights, including their right not to be unfairly dismissed (if applicable) and their redundancy rights (including to redundancy pay), are unaffected.

It also means that the normal rules on statutory maternity pay, paternity pay and shared parental pay apply. This does mean though that if an employee is due to start maternity leave (or another similar leave) and are placed on furlough, it could have an impact on the statutory pay they are entitled to.

How should I place an employee on furlough?

Normal employment rules and protections apply in terms of placing an employee on furlough. For instance, employers will need to discuss the changes with employees and seek their agreement to change the employment contract. In addition, if the employer is selecting employees to be furloughed, then normal rules in relation to equality and discrimination apply and employers will need to consider any selection criteria accordingly. Employers should also consider if collective consultation obligations are triggered.

Employers should ensure that they have a confirmation in writing that the employee is furloughed.

Note that, employees must be placed on furlough for a minimum of 3 weeks, but need not be furloughed for the entire period.

How does the employer access the money for furloughed employees?

Employers calculate their claim and should submit it through an online portal that will be established by the UK’s HM Revenue and Customs (“HMRC”). HMRC expects that it will be available by the end of April 2020.

If the employer is eligible for a grant, the grant will be paid to the employer’s UK bank account.

What happens when the CJRS ends?

CJRS is currently open for at least 3 months through to at least 31 May 2020. The Government will keep the scheme under review and may extend it.

At the end of CJRS, the employer will need to make a decision on whether the employee returns to work or is dismissed/made redundant.

Proskauer’s cross-disciplinary, cross-jurisdictional Coronavirus Response Team is focused on supporting and addressing client concerns. Visit our Coronavirus Resource Center for guidance on risk management measures, practical steps businesses can take and resources to help manage ongoing operations.

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