13 Nov 2020
Employers across Scotland are being warned that they need to meet today's deadline if they wish to implement retrospective furlough agreements with their employees following the announcement of an extension of the scheme at the end of October.
Following the “eleventh hour” extension to the Coronavirus Job Retention Scheme (“CJRS”), HMRC published updated guidance which has raised some key points employers should be aware of.
Perhaps the most important of these issues is one which concerns the return to furlough of employees.
With employers anticipating the end of the scheme on 31st October many had taken steps to arrange for the return of their “furloughed” employees, many by agreeing arrangements under the Job Support Scheme (whether “Open” or “Closed”) which has now been delayed.
This meant that a number of employees returned to work on 2nd November 2020 to be advised that with the last minute extension to the CJRS, they were to be re-furloughed. However, employment law principles still apply despite the rapid changes to these schemes and employers’ options. Any return to furlough must be by agreement with the employee and appropriately documented. Furthermore, whilst retrospective agreement may be implemented, this must be concluded by no later than 13th November 2020.
However, the retrospective claims deadline is only one of the key areas which employers need to be aware of.
Under the previous extension, the CJRS only applied to employees who had previously been furloughed on or before 10th June 2020 unless returning from a period of statutory parental leave. However, the cap on the number of employees who may be placed on the CJRS has now been lifted and all employees who were on the employer’s payroll on 30th October 2020, and had been included in a Real Time Information (RTI) submission during the period 20th March 2020 and 30th October 2020 may be eligible for furlough. The scheme is open to employers who have never used the CJRS previously
The recent extension of the CJRS also permits the inclusion of employees who were made redundant or had previously stopped working for the employer on or after 23rd September 2020 if they are then rehired. This will require agreement between the employer and the employee. When re-hiring, employers should be mindful of the effect of rehiring on the employee’s continuous service, notice periods and the reason for termination should this be reviewed in the future.
Employees who are serving contractual or statutory notice periods will be eligible for inclusion on the CJRS for claims up to 30th November 2020. The Government will however review this position during November and updated guidance is anticipated in respect of CJRS claim periods commencing on or after 1st December 2020.
Flexible furlough is still permitted, thereby enabling employers to utilise employees for a proportion of their hours if/where possible. Unlike the Job Support Scheme, there is no minimum number of hours which require to be worked in order for the employee to be eligible to participate in a flexible furlough arrangement.
The CJRS enables employers to claim 80% of an employee’s usual salary for hours not worked up to a maximum of £2,500 per month. Employers are expected to meet the costs of the employers National Insurance contributions and the employer pension contributions in respect of the entire salary payment made to the employee. In addition, where an employee is flexibly furloughed, employers may not claim for salary payments made in respect of hours worked by the employee.
These remain difficult times for employers, with many attempting to maintain their survival as well as rebuild and recover.
The changes to the government’s furlough schemes are not always easy to digest and implement, especially for those small and medium d businesses who may not have their own specialist HR departments.
It is vital that all employers follow the guidelines and regulations if they are to avoid time consuming and potentially damaging investigations from HMRC, and if you are unsure about any aspect of employment procedure our employment law team is available to provide advice and guidance.