Until recently, most people in the UK had never heard of furlough, but the impact of coronavirus on the economy means that over the next few months, millions of workers will rely on this scheme.
Furloughed workers are common in the United States. The term furlough means the temporary leave of staff due to the special needs of an employer, caused by the economic conditions of a specific employer - or the economy as a whole.
Furlough leave is a new idea - introduced as an alternative solution for employers who might otherwise have had to put into practice redundancies; unpaid leave or other measures for their staff.
Rishi Sunak - the Chancellor of the Exchequer - recently announced that if employers are unable to cover staff costs due to the coronavirus, they may have the option of applying for support to enable them to continue paying 80 per cent of their employee’s wages, up to a maximum of £2,500. The guidance at present states that all businesses will be eligible to claim a reimbursement for at least three months - backdated from 1st March 2020 - and this period may be extended if necessary.
The employees named as furloughed workers will remain in employment and consequently will continue to be on the company payroll; accrue holidays and accrue continuous service. Employers may, if they wish, add to the 80 per cent wage paid under the government scheme, to enable the furloughed staff to receive their full wage but this is not compulsory.
Coronavirus restrictions mean that the work of many firms - such as pubs, restaurants, cafes, travel firms and estate agents has come to a standstill and a recent YouGov poll suggested that one in 20 workers have already lost their jobs because of the pandemic.
Any UK organisation with employees can apply, but in practice it is thought that it will mainly be private sector businesses and charities that claim.
Amongst the firms that will furlough a significant proportion of staff are British Airways and EasyJet with Greggs, McDonald's, Arcadia and Nissan also among firms furloughing all or part of their workforce
