As a result of the latest national lockdown, the Government has decided to put its new Job Support Scheme on hold, and extend the existing Coronavirus Job Support Scheme (flexible furlough). This is good news for employers and employees who may be experiencing a reduced workload as a result of the second lockdown. On 10th November 2020, the guidance for the extended scheme was released. The key points of the extended scheme are as follows:
What can an employer claim?
Employers can claim 80% of an employee’s usual salary for the hours that they do no not work from 1st November 2020. However, this sum is capped at a maximum of £2,500 per month.
Which employees qualify?
Under the extended scheme, employers can claim for employees who were employed as of 30th October 2020, providing that they have made a PAYE RTI submission to HMRC between 20th March 2020 and 30th October 2020. Although this is not necessary if the employer re-employed the employee after 23rd September 2020.
How many employees can be placed on the scheme?
There is currently no limit on the number of employees that an employer can place on the extended scheme. However, employees who are returning from maternity leave will need to give the statutory 8 weeks’ notice to end the maternity leave in order to be placed on the scheme and receive furlough pay.
Is a furlough agreement required?
Yes, employers must ensure that they confirm to the employee in writing that they have been placed on furlough. The employer must ensure that a record of this agreement is kept for a period of 5 years thereafter.
Can furlough be backdated?
Employers and employees can agree to apply furlough retrospectively from 1st November 2020. However, the agreement to retrospective furlough must be made on or before 13th November 2020.
How does TUPE apply?
If an employee has transferred into a business under TUPE, the employee must have been employed by their prior employer on or before 30th October 2020 and transferred to their new employer on or after 1st September 2020 in order to claim under the furlough scheme.
Although the government has issued 13 sets of updated guidance, it is clear that the scheme will be subject to ongoing review. The guidance states that the Government are currently considering whether employers can claim for the salaries of those employees who are working contractual or statutory notice periods. This was a bit of a grey area under the previous scheme, but it is anticipated that further guidance will be issued in late November, with any potential changes coming into force from 1st December 2020. In light of the uncertainty surrounding the terms of the furlough scheme, if an employer considers it may be necessary to make redundancies, it may be safer to do so prior to 1st December.
Employers should also note the extended scheme will permit the Government to publish the names and registration numbers of any companies or LLPs that make claims under the scheme from December 2020 onwards.
BTMK can help employers and employees with all employment related issues, whether it’s dealing with non-contentious or contractual issues or issues of employment litigation being dealt with in the tribunal. If you require assistance in relation to the furlough scheme, or any other employment matter, please contact me on 01702 238514 or [email protected]
