An employee furlough refers to a temporary leave or modification of normal working hours for a specific amount of time. It’s a leave of absence given to an employee with the promise that they will still have their job once the leave is over.
There are numerous reasons why employers implement a furlough employee policy, such as plant shutdowns, seasonal work, company reorganizations and reduced demand due to COVID-19.
Don’t rush into implementing an employee furlough policy without talking to your lawyer or HR specialist first.
If you decide that putting employees on furlough is the best option for you and your employees, then you need to prepare a notification letter. Your furlough notice letter should contain the following:
- Address – This is a formal letter, a furlough notice should clearly state the date, employee’s name, and their address.
- Purpose – State the purpose of the letter. Get straight to the point. Include the employee’s position, department, reason for the furlough, and information about any changes to employee benefits. It is advisable to tell the employee that this action does not reflect dissatisfaction in job performance.
- Detail – Explain what a furlough is, determine the length of the furlough, and communicate employee benefits during this period to employees.
- Future communication – Offer a way for the employee to keep in touch. End the letter on a positive note.
Impact of coronavirus on our organisation
Dear [ ]
[I refer to our [meeting/video conferencing call] with [you/the workforce] on [date], during which we explained how the COVID-19 outbreak has impacted our business and the details of the Government’s Coronavirus Job Retention Scheme.]
To minimise the need for redundancies because of the [temporary closure of your place of work/temporary reduction in the need for your role/downturn in business], we are planning to “furlough” staff on [full pay/pay reduced by 20%] where we cannot provide them with any work.
This means that staff may be designated (with their agreement) as a “furloughed worker” in the coming weeks, which means they will not be provided with work, and we can continue to pay them through funding from the Government’s Coronavirus Job Retention Scheme.
See www.gov.uk/government/publications/guidance-to-employers-and-businesses-about-covid-19/covid-19-guidance-for-employees#furloughed-workers for further details of the scheme.
Staff will not be “furloughed” while absent from work as a result of medical advice and self-isolation guidance. They are receiving [statutory/contractual] sick pay. Staff who are able to work from home are not “furloughed workers” and are expected to continue to do so even though our work locations are now closed.
During the furlough period, a furloughed worker will:
- continue to be employed by us;
- not carry out any work for us; and
- continue to receive [wages/salary] [, although reduced by 20%].
Terms and conditions of employment and continuity of employment will not be affected during this period.
What happens next
The Government’s Coronavirus Job Retention Scheme is initially set to run until the end of May 2020, but the Government has said that the scheme will be extended if necessary. We are keeping the situation under review and will keep you updated as the coronavirus crisis unfolds in the coming months.
We must stress that our plans are based on the Government’s initial announcement on 20 March 2020 about the Coronavirus Job Retention Scheme. Please bear with us while we await the exact details of the scheme and then determine which workers can be designated as “furloughed workers”.
The decision as to whether or not you accept any offer that we make to furlough your employment [on reduced pay] is ultimately going to be one for you. However, the alternative may be compulsory redundancy or unpaid leave.
I would like to reassure you that, even if your employment is furloughed, we are determined to [reopen your place of work/reintroduce your role/see an upturn turn in business] once the situation has improved.
Please look out for further updates and do not hesitate to contact [me/name of individual/the HR department] if you have any queries or concerns.