Over the weekend updated guidance has been published about the Coronavirus Job Retention Scheme. Whilst there remain a number of important unanswered questions, the updated guidance has at least provided clarification about a number of key issues.
The Coronavirus Job Retention Scheme (CJRS) has been created to support employers who cannot support their workforce due to coronavirus. Employers can furlough employees and apply for grants to cover 80% of their usual monthly wage costs, up to £2,500 per month per employee, plus the usual employer NIC and minimum employer automatic enrolment pension contributions. The Scheme is initially in place for 3 months from 1st March 2020.
The new guidance confirms that:-
- An employee CAN be furloughed even if they were not necessarily at risk of being laid off themselves, it gives examples of employees who are unable to work because they are shielding or due to childcare reasons
- Employees CAN be furloughed multiple times but remember each period must be for a minimum of three weeks. Practically, this will allow employers to rotate people.
- Apprentices (and so-called limb B workers who are paid through PAYE) ARE included in the scheme
- Somewhat controversially, an employee who has been furloughed IS able to go and work for a new employer. Is this an unexpected windfall for employees given that the purpose of the Scheme is to keep people in work? Maybe it is because they want people to take on jobs where it is needed in the economy eg agricultures, NHS, caring sector
- An employee who has more than one job CAN be furloughed from each employer, each job is separate and the cap applies to each employer individually
- If you are employed by an umbrella company, the umbrella company CAN furlough you and claim back 80%
- Company directors CAN be furloughed but as with others, they can’t do any work, other than their statutory duties. It remains unclear quite what that means. If a director is to be furloughed then resolution must be formally adopted by the board of directors and communicated to the directors
- An employee CAN complete volunteer work or training whilst furloughed as long as it does not provide services to or create revenue for the employer.
- It is now clear that the notification of furlough must be in WRITING and it must be retained for 5 years
- Arguably in a change to the Scheme, it has now been confirmed that the sums an employer can reclaim INCLUDE wages, past overtime, fees, compulsory commission payments but NOT discretionary bonuses, tips, discretionary commission payments or benefits in kind
So what do we still not know?
- Annual Leave – Can they take it (it is suspected yes) and, if so, what should employees be paid? Is it calculated by reference to their 80% furlough pay or, as would be the case as of today, their normal remuneration calculated by reference to the previous 52 week period?
- Directors – Precisely what duties can they carry out?
- TUPE – What about employees who have TUPE’d across to a new employer after the 28th February, are they covered by the Scheme?
These are just some examples of the areas that remain unclear despite the publication on 04 April of further guidance. You should keep up to date with the latest information, guidance and advice as this is a very fluid situation which is changing on a daily basis. This blog is no substitute for legal advice and specialist advice should always be sought about your particular situation.
Employers can obtain expert employment law advice about the CJRS and any other employment law matters in a timely and efficient manner from Hibberts solicitors. You may also benefit from advice upon how to implement the Scheme and template letters.
Should you or your business require employment law advice at this difficult time then please don’t hesitate to contact us. For more information, visit us here.