Update: Extended Coronavirus Job Retention Scheme
The Government yesterday evening announced further details on the extended CJRS furlough scheme.
The overview of the scheme states: If you cannot maintain your workforce because your operations have been affected by coronavirus (COVID-19), you can furlough employees and apply for a grant to cover a portion of their usual monthly wage costs where you record them as being on furlough.
This possibly suggests that industries unaffected by coronavirus e.g. food manufacturing, should not utilise the scheme.
The restrictions on publicly funded organisations utilising the furlough scheme continues.
The extended Furlough scheme will operate until 31 March 2021. Until at least January 2021 it will mirror the level of support available under the Furlough scheme in August, with the Government paying 80% of wages up to a cap of £2,500 but with the employer paying the employer’s NI and pension contributions. The level of support will be reviewed in January 2021 and may change for February and March.
The last day employers can submit or change claims for periods ending on or before 31 October 2020, is 30 November 2020.
The flexible furloughing option continues to be allowed under the extended CJRS, as well as the standard full-time furloughing.
The Government has widened the CJRS scheme so that, to be eligible to be claimed for under this extension, employees must have been on an employer’s PAYE payroll between 19 March 2020 and 30 October 2020. This means a Real Time Information (RTI) submission notifying payment for that employee to HMRC must have been made on or before 30 October 2020. There may be an exception where an employee has been re-employed under the ‘23 September 2020’ provision (see below).
Employees that were employed and on the payroll on 23 September 2020 who were made redundant or stopped working for their employer after that date can be re-employed and claimed for. However, it is a not requirement of the scheme that this must happen, but separately may be an employment law consideration.
Agreement with employees to be placed on furlough must be made in writing.
To be eligible for the grant, employers must have confirmed to their employee (or reached collective agreement with a trade union) in writing that they have been furloughed and must keep a written record of the agreement for five years and keep records of how many hours employees work and the number of hours they are furloughed (i.e. not working).
The guidance states that ‘the employee does not have to provide a written response’. From our perspective, we are of the opinion that it would be beneficial.
“Only retrospective agreements put in place up to and including the 13 November 2020 may be relied on for the purposes of a CJRS claim.” This seems to suggest that to re-employ a dismissed employee the agreement must be in writing by 13 November 2020. Although this is not entirely clear.
The guidance remains unclear in respect of what re-employing means. This is not a legal term as such. There are unanswered questions still. Does the employee have to be paid back pay? Can this money be claimed prior to 1 November? Does the employee have to return their redundancy pay? Is it a continuity of employment or a brand new contract? Legal commentators have differing views on this.
This recent twist in terms of the ability to re-employ on the scheme and the unexpected extension of the scheme has an impact particularly on three scenarios, in respect of employees.
- those which are currently subject to a redundancy process;
- those which are currently serving their notice under redundancy; and
- those that have terminated their employment since 23 September for whatever reason and perhaps particularly for redundancy (please note that for calculation purposes this is the end of their notice period).
In general employment law terms, an employer must take reasonable steps to try to avoid making a redundancy. The updated guidance does not assist with this question. However, our view is that those undergoing a redundancy process at present or who are under notice, then the approach to be taken is that there is an initial presumption that the employee will not be made redundant at this time but instead will be placed on the furlough scheme. Subject of course to the scheme rules.
As a minimum though, the employer will need to acknowledge the CJRS scheme and explain and justify to the employee who is at risk of redundancy or currently in their notice period why the scheme will not be utilised. If this is the decision. In other words, it has to be considered by the employer and a reasonable rationale provided.
The very real problem here, is that there is no case law to indicate how the employment tribunals will look upon the decision of an employer not to utilise the scheme. However, there is a possibility that a tribunal will take the approach of ‘why wouldn’t they use the scheme?’.
At this stage, a similar approach should be taken to those terminated since 23 September 2020 and who did not exit under a settlement agreement. The employer should be prepared to demonstrate a good reason why an employee should not be re-employed. Again, we do not know how employment tribunals will approach this but this seems particularly relevant to those that have been made redundant, during this timespan.
If the 13 November agreement deadline is correct then you will note that employers have a very limited window of opportunity to make the necessary arrangements to re-employ an employee.
Employees can still continue to work elsewhere whilst on the scheme, as long as their contract of employment does not prevent this.
Employers can claim the grant for the hours that their employees are not working, calculated by reference to their usual hours worked in a claim period. For hours not worked by the employee, the Government will pay 80% of wages up to a cap of £2,500, which must be paid to the employee in full. If the employer wishes, they can top up these wages at their own expense.
Employers will be able to claim from 8am on Wednesday 11 November 2020. Claims can be made:
- in respect of an employee for a minimum 7 day claim window
- in advance
- in arrears for the period from 1 November 2020 to 11 November 2020
The government is reviewing whether employers will be eligible to claim for employees serving contractual or statutory notice periods and will change the approach for claim periods starting on or after 1 December 2020, with further guidance published in late November. For the moment, employers are able to make claims in this regard.
It now appears that employees who wish to return from maternity leave must give the statutory 8 weeks’ notice of returning and cannot agree with the employer to reduce this notice period.
The ability to require an employee to take holiday whilst on furlough continues although employees who do not normally work a bank holiday cannot be placed on furlough on these days.
With regards to sick employees. The new guidance states that if your employee is:
- unable to work because they are clinically extremely vulnerable, or at the highest risk of severe illness from coronavirus and following public health guidance; or
- unable to work because they have caring responsibilities resulting from coronavirus (COVID-19), including employees that need to look after children.
Then they are eligible for the grant and can be furloughed. This seems to suggest that the absence needs to be Covid linked.
However later on in the guidance it makes no mention of Covid and states that ‘Employers can furlough employees who are clinically extremely vulnerable, at the highest risk of severe illness from coronavirus or off on long-term sick leave. It is up to employers to decide whether to furlough these employees.’ On this basis, the guidance again, is not as clear as it could be.
The CJRS is not intended for short-term sick absences. If, however, employers want to furlough employees for business reasons and they are currently off sick, they are eligible to do so, as with other employees.
Furloughed employees who become ill, due to coronavirus or any other cause, must be paid at least Statutory Sick Pay (SSP). As under the CJRS previously, it is up to employers to decide whether to move these employees onto SSP or to keep them on furlough, at their furloughed rate.
Lastly, the Government intends to publish a public register of those businesses utilising the scheme.
Last updated 11 November 2020