The Coronavirus Act 2020, furlough leave, and annual leave carry over

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Coronavirus Act 2020

The Coronavirus Act 2020 received Royal Assent on 25 March 2020. It provides for the following employment-related changes:

  • The right to take unpaid emergency volunteering leave subject to specific conditions being met.
  • Changes to the statutory sick pay provisions disapplying the usual three-day waiting period, enabling a person who is absent from work due to the coronavirus to be paid statutory sick pay from day one. Small and medium employers can recover up to two weeks statutory sick pay. This change only applies to sickness absence which is related to coronavirus.
  • Health regulators can register suitable healthcare professionals and social workers (such as retired professionals and medical students) on an emergency basis and NHS pension rules have been altered to allow recently retired professionals in this field to return to work.

Furlough leave

We have also been very busy over the last week or so advising clients on furlough leave and assisting them with the necessary documentation. By way of reminder, furlough leave is an entirely new concept the government has introduced to offer financial assistance to businesses in this unprecedented and troubling time.

If an employee is placed on furlough leave, then they are unable to undertake any work for the business but remain on payroll. An employer must commit to the employee being on furlough leave for a minimum of three weeks and, currently, HMRC are committing to pay for a maximum period of three months. However, this will be reviewed by the government and we will provide you with further updates accordingly.

An employee on furlough leave will receive 80% of their salary, up to a cap of £2500. This is payable by the employer, in the first instance, who will subsequently be reimbursed. You, as the employer, will need to submit your claim online. According to the government website, this online service is not yet available but is expected to be up and running by the end of April 2020.

Annual leave carry over

The government has relaxed the restriction on carrying over the four weeks’ leave. Under the Working Time (Coronavirus) Amendment Regulations 2020, carry over of untaken WTD leave is permitted where it was not reasonably practicable to take in the leave year “as a result of the effects of the coronavirus (including on the worker, the employer or the wider economy or society)”. Carry over may be taken into the two leave years immediately following the leave year in which it was due.

At our last HR Breakfast Club, we discussed holiday pay and the difference between the four weeks under the Working Time Regulations and the 5.6 weeks statutory leave. This amendment relates to four weeks leave under the WTR, and not the remaining 1.6 weeks statutory leave or any additional contractual leave over and above this.