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A Furlough Letter is a document by which an employer informs their employee that their employment will be furloughed either for a short specified period or a long unspecified period. A furlough is compulsory time off or a leave of absence with no pay. For example, an employee may be furloughed because the employer can no longer afford to pay salaries due to a downturn of business activities, or the employer does not require the services of the employee at a particular period.
For an employer, the goal of this compulsory leave is to save money by reducing the cost of running a business. It is intended that when an organization's expenses outweigh its revenue, the employer would want to cut back on expenses to save money, and this may lead to furloughing some employees.
A furlough does not seek to terminate employment- it is the best alternative to dismissal or termination of employment. It is true because the affected persons remain employees of the organization who can resume work after the furlough period as they remain bound by the Employment Contract. Usually, during the furlough period, the employee may not be entitled to any remuneration and is not required to render any services to the employer.
How to use this document
This document can be used by an employer to make a formal notice to their employee who will be placed on furlough, and even though the employer has discussed the furlough arrangement with the employee, it is also necessary to keep a written record of it. The document requires the names and addresses of the employer and the affected employee, the leave period, and any other conditions that may apply to the employee during the compulsory leave of absence. It also explains the reason for the furlough, whether it is due to the financial instability of the employer's business, a downturn in business, or other reasons.
After completing the form, the document should be printed in at least two copies and signed by the employer. The employer should send a signed copy of it to the employee either by letter or email.
The employer should keep one copy of this document for record purposes.
The Labour Act of 2004 applies to employment matters in Nigeria.
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Other names for the document: Employee Furlough Letter, Furloughed Employee Letter, Mandatory Furlough Letter, Notice of Temporary Layoff or Furlough, Flexible Furlough Letter