Since our latest factsheet (23 October) on the Coronavirus Job Retention Scheme (CJRS) / Job Support Scheme (JSS), there has been a change of play again (as we have come to expect over the last few months!) The JSS and job retention bonus have been put on hold for now and the CJRS (the “furlough” scheme) will remain in place until March 2021.
Latest guidance – key points
The latest guidance was issued on 10th November. In summary, the key points for our clients to be aware of are:
- The extension to the CJRS, which commenced on 1 November, will remain open until 31 March 2021 but will be reviewed during this period.
- The minimum payment to employees for hours not worked (in order to qualify under the Scheme) is 80% of their usual pay for those hours (or, if lower £2,500 for the month). NB this percentage is being reviewed and is likely to change after January 2021.
- It is available for any employee who was employed as at 30 October 2020 and for whom a PAYE Real Time Information submission to HMRC has been made (notifying a payment of earnings for that employee) between 20 March and 30 October (but see the additional point below regarding those who were made redundant on or after 23 September).
- You do not need to have previously furloughed any staff in order to use the Scheme now.
- Employers who use the Scheme from December onwards will be identified on a public register
- There is no limit on the number of employees who can be claimed for.
- Agreement can be made with an employee to retrospectively claim under the furlough scheme from 1 November provided this written agreement was in place by Friday 13 November. A precedent agreement is available on our website here.
- Employees who were made redundant or stopped working for their employer on or after 23 September 2020 can be re-employed and claimed for under the on-going furlough scheme. There is no legal obligation to re-employ, it is an option.
- Employees who are shielding in line with public health guidance are eligible for the furlough scheme (as are those who must stay at home with somebody who is shielding).
- It remains unclear whether employers will be able to continue claiming for an employee who is on notice (including those resigning). Further Government guidance has been promised on this point for later this month. We anticipate that it will be permitted for now, but that the position may change in December. Employers who are considering dismissal of employees who are currently furloughed may find they are unable to take full advantage of the scheme if they delay giving notice until December. Please contact us for further guidance if you are unsure of the implications of this.
- As before, you’ll need to agree in writing with each employee who is to be furloughed. A copy of this written agreement should be kept for 5 years.
Re-employing staff – potential issues
We particularly wanted to examine the idea of re-employing staff with our clients. This has some far-reaching implications and may not be as simple as it sounds on a first reading.
There is an argument that a dismissal between 23 September and 31 October 2020 could be unfair where:
- the only reason for the employee’s dismissal was that the furlough scheme was ending (i.e. had it been extended, they would not have been dismissed); and
- before their employment ended, the furlough scheme was extended but they were still dismissed (i.e. their employment ended before 31 October 2020); and
- they were not subsequently re-employed under the extended scheme
Where that is not the case, for many organisations, there will be a dilemma. Although there may be the theoretical possibility of re-instating the employee, doing so in practice will mean balancing the desire to help staff facing unemployment, with the need to manage resources well.
Points to consider for those in this situation:
- if you are a charity, is this consistent with your charitable objectives? For example, if the employee is providing no service and you know that will not change but you are merely keeping them on the books for a period to be kind, how would the associated expenditure (see below) be consistent with your objectives?
- Is there a genuine possibility of a new role, or their existing role, being available in a further 4 months’ time?
- If you are not going to top up the wages, you will need a written agreement in place with the employee that covers what is effectively a pay cut to avoid an “unlawful deduction from wages”
- You will still need to pay employer national insurance contributions and pension contributions whilst the individual is furloughed.
- Annual leave will continue to accrue whilst the employee is furloughed, either meaning that if there is no role for them after 4 months, they will be entitled to a payment of accrued annual leave when they are made redundant again, or if they are not made redundant, they will have annual leave to take once their employment starts again.
- Any holiday they take whilst employed must be at 100% of pay.
- If you re-employ an employee and then need to make them redundant again, they may be entitled to a larger redundancy payment (for example because they complete an extra year’s service)
- There may be management time and cost in dealing with a redundancy process, once the extended furlough ends.
Get in touch
As always, we anticipate further guidance on this as the days and weeks go on and we will endeavour to update clients if there are changes to the above. If you would like to discuss the implications of the extended furlough scheme for your organisation or church, please contact a member of the Employment Team for further advice.