Furlough

Finally! The Government has just announced guidance on Annual Leave during Furlough Leave.

Here is the link.

However, in summary here are the two key points to note:-

1. It is possible for employees to take annual leave while on Furlough Leave.
2. If an employee takes annual leave whilst on Furlough Leave then the employer must top up to 100% of normal salary.

The Guidance is silent on whether an employer can compel an employee to take annual leave during Furlough leave. However, it is presumed that the normal employment law rules will apply.

Astons Solicitors
17th April 2020

The Government have today announced that the coronavirus job retention scheme has been extended to 30th June 2020 – see here. The reason for this announcement today could well be that large businesses who may have been contemplating making 100 or more redundancies within a period of 90 days would otherwise may have started collective consultation imminently in order to tie in with what was going to be the end of the Furlough Scheme (31st May 2020). Astons Solicitors 17th April 2020

The Treasury has issued a Direction to HMRC pursuant to its powers under the Coronavirus Act 2020 to give authority for HMRC to administer payments under the Coronavirus Job Retention Scheme. The Direction and “Schedule” which sets out the details of the Coronavirus Job Retention Scheme (“the Scheme”) are here.

It will be noted that the Scheme itself (and in turn the Guidance) has been further updated and although further amendments are possible it looks likely this will be the final version. The updated guidance is here.

There are changes and clarifications to the Scheme. Some of the key ones are:-

1. Furloughed employees that were on an employers PAYE payroll on or before 19 March 2020 and which were notified to HMRC on an RTI submission on or before 19 March 2020 can now claim. Previously this date was 28th February 2020. Employees that were employed as of 28 February 2020 and on payroll (i.e. notified to HMRC on an RTI submission on or before 28 February) and were made redundant or stopped working for the employer after that and prior to 19 March 2020, can also qualify for the scheme if the employer re-employs them and puts them on furlough (see the Guidance and sections 3.2 and 5(a) of the Schedule).
2. It provides that the Scheme applies to anyone furloughed “by reason of circumstances as a result of coronavirus or coronavirus disease.” (section 6.1 © of the Schedule). It is therefore NOT limited to employees who would otherwise have been made redundant. It goes much wider than this in fact.
3. Section 6.7 of the Schedule for the Scheme states that to claim furlough, “An employee has been instructed by the employer to cease all work in relation to their employment only if the employer and employee have agreed in writing (which may be in an electronic form such as an email) that the employee will cease all work in relation to their employment.”
4. Section 7.3 of the Schedule states that in determining an employee’s reference salary, no account is to be taken of anything which is not regular salary or wages. Sections 7.4 to 7.5 of the Schedule address this further.

There is still no guidance on holidays and holiday pay unfortunately. However, ACAS guidance recently published states, “Employees or workers who are temporarily sent home because there’s no work (‘furloughed workers’), can request and take their holiday in the usual way, if their employer agrees. This includes bank holidays. Furloughed workers must get their usual pay in full, for any holiday they take.” However, as ACAS is an independent organisation, it would have been helpful to give certainty for employers on this and hence for the Government to have addressed this in the Schedule sent to the Treasury and in turn in its Guidance.

15th April 2020
Astons Solicitors

Last night the Government published a third updated version of the Coronavirus Job Retention Scheme. The link is here. It is self explanatory for the most part but I highlight below some particular changes:- Employers can furlough shielding employees (that is shielding in line with public health guidance (or need to stay at home with someone who is shielding)). They do not have to be placed on sick pay. Furloughed employees who become ill must be paid at least Statutory Sick Pay. It is up to employers to decide whether to move these employees onto Statutory Sick Pay or to keep them on furlough, at their furloughed rate. The position on whether staff who have recently been TUPE transferred can be furloughed is cleared up. Yes they can be furloughed subject to meeting the criteria – “A new employer is eligible to claim under the CJRS in respect of the employees of a previous business transferred after 28th February 2020 if either the TUPE or PAYE business succession rules apply to the change in ownership.” Employees cannot work for organisations that are “linked” to the employer, as well as not working for the employer when on furlough leave. There is still no firm guidance in this update regarding whether holidays can be taken during Furlough Leave and if so, what is the rate of holiday pay for this under the Scheme. However, earlier this week, HMRC Customer Support tweeted as follows, “If an employee is on holiday or has a scheduled Bank Holiday while on furlough, they are entitled to still receive this holiday. Employers must ensure that any employee on holiday or a Bank Holiday is paid their full salary for that period of holiday.” We still require certainty though over this in the form of clear Government guidance. Hopefully the Government will address this in a further update of the Scheme in the coming days. Astons Solicitors 10th April 2020

The Government has published more guidance on the Coronavirus Job Retention Scheme – please see here. This is very helpful and self explanatory. Please note that there is one big (but helpful) U-turn in the guidance, namely, it now states that employers, “can claim for any regular payments you are obliged to pay your employees. This includes wages, past overtime, fees and compulsory commission payments. However, discretionary bonus (including tips) and commission payments and non-cash payments should be excluded.” Previously, the guidance had stated “Fees, commission and bonuses should not be included.” Further, it is interesting to note that Furloughed employees can work for another employer if the contract of employment allows this. Presumably, as a contract of employment can be varied by mutual agreement, it means that an employer can allow an employee to get another job during Furlough Leave. Until now, the government guidance had been silent on this. However, there are still several questions that need answering. In particular, two key questions employers would really like answers to that are yet to be clarified by the government are as follows:- Can Furloughed employees take or be put on holiday during Furlough Leave? If Furloughed employees can take holiday how much does the employer have to pay them? Specifically, is it 80% of their salary capped at £2,500 (gross) a month or 100% of normal salary? With bank holidays looming and other pre booked annual leave over Easter these are questions that need answering by the government and very soon. Astons Solicitors 4th April 2020

The Government have, overnight, published more Guidance about the Coronavirus Job Retention Scheme. See here

It is not extensive but is nonetheless very helpful. We expect more guidance and/or legislation in the coming weeks but for now it answers many (but not all) questions Employers have.

In any event, when making a claim to HMRC this is the guidance for now that can be relied upon by Employers.

Finally, and of upmost importance it states, in particular, for Employers “to be eligible for the subsidy employers should write to their employee that they have been furloughed and keep a record of this communication,”. Employers will still need to have that negotiated first (i.e mutually agreed) unless there is a lay off clause in the employee’s contract of employment.

Astons Solicitors
27th March 2020