Update: On 13 November the Government published updated guidance, together with the Treasury Direction implementing the extended scheme. Both the guidance and the Direction make it clear that for claim periods starting on or after 1 December 2020 employers cannot claim for any days on or after 1 December 2020 during which the furloughed employee was serving a contractual or statutory notice period.
As promised in its policy paper of 5 November 2020, the government duly published updated guidance yesterday on the terms of its extension to the Coronavirus Job Retention Scheme (CJRS). There are 9 documents in total (see Useful Links).
Much of the guidance aligns with the scheme terms which were in place between 1 March 2020 and 31 October 2020. However, there are some important points to note:
- The most significant provision of the updated guidance is new wording which impacts directly on employers who have given, or may be about to give, notice of termination to employees (for reasons of redundancy or otherwise) and who were anticipating being able to claim a grant for the employees’ notice period. The updated guidance initially states that employers ‘can continue to claim for a furloughed employee who is serving a statutory notice period’, which is in accordance with the pre-1 November 2020 regime (albeit it still remains unclear whether the omission of reference to the contractual notice period is an error, or deliberate). However, the guidance then goes on to say that, ‘The government is reviewing whether employers should be eligible to claim for employees serving contractual or statutory notice periods and will change the approach for claim periods starting on or after 1 December 2020, with further guidance published in late November‘. This is a departure from the previous scheme and, although it appears that grants will still be payable for employees with notice periods running during November, employers may now need to reassess their approach to giving notices of termination where notice will run past 1 December 2020. It may be that the government will decide that, after this date, grants cannot be claimed for employees serving notice. Employers will, however, very unhelpfully have to wait for the new guidance before having any clarity on this position.
- There is no change to the position that holiday both accrues, and can be taken, during a period of furlough. However, many employees may not fully understand, or be aware of, their ability to take holiday during furlough. As a matter of good employment relations practice (and to avoid any potential debate over carry-over) employers should therefore consider reminding employees to take their holiday as soon as possible, particularly if their holiday year is drawing to a close at the end of December 2020. Holiday is payable at the normal rate of remuneration and employers may therefore need to top up furlough pay (if not already doing so) for any holiday days taken.
- Employers will need to determine the appropriate reference period when calculating employees’ usual hours and usual pay for the purposes of their CJRS claim. For fixed hours/pay employees, the guidance distinguishes between (1) employees who either were on payroll (with an RTI submission made) on or before 19 March 2020 or in respect of whom a valid CJRS claim was made on or before 31 October 2020 – for these employees the reference period is the last pay period ending on or before 19 March 2020; and (2) all other employees – for these employees the reference period is the last pay period ending on or before 30 October 2020. A slightly different approach must be used for variable hours/pay employees.
- There are some key deadlines which employers should note:
- 13 November 2020: the last date to put in place a retrospective furlough agreement in order to backdate claims to 1 November 2020;
- 30 November 2020: the last date for submitting claims relating to periods up to and including 31 October 2020;
- 14 December 2020: the last date for submitting a claim for the period of November 2020. Employers should also note that there is a new monthly deadline for all claims going forward, which is 14 calendar days (or next working day) of the following calendar month. There is a useful reference table in the Claim for wages through the CJRS guidance.
- From December 2020, HMRC will publish the names of the employers who have made a claim under the CJRS for the month of December 2020 onwards.
- Finally, there are some apparent errors in the drafting of which employers should be aware:
- While the position on sickness appears to remain that employers can decide whether ill employees should be on sick leave (and potentially entitled to SSP) or on furlough (and entitled to furlough pay), with the two being mutually exclusive, there is text in the Check which employees you can put on furlough to use CJRS guidance which states that sick furloughed employees can only continue to be furloughed if they have previously been placed on furlough before 30 June 2020 and a claim submitted by 31 July 2020. It appears that this wording has been erroneously included from the previous guidance as there is no requirement otherwise under the extended CJRS for employees to have previously been furloughed. Further, there would appear to be no rationale for treating sick employees less favourably than other employees in terms of entitlement to be furloughed. We therefore suggest this is an error which will hopefully be remedied in further iterations of the guidance.
- In relation to TUPE, the guidance confirms that for claim periods after 1 November 2020, a new employer will be eligible to claim for TUPE transferred employees if the TUPE rules apply and the employees were employed by the old employer on or before 30 October 2020 and transferred to the new employer on or before 1 September 2020. The 1 September date does not make sense and we again suggest this is an error which will hopefully be picked up and amended. UPDATE – 12 Nov: NB The guidance was updated on 12 November 2020 with new provisions to correct the drafting error in the 10 November guidance. The employees being claimed for must now have transferred to the new employer on or after 1 September 2020 and be employed by either the old or new employer on 30 October 2020, with an RTI submission having been made by either the old or new employer between 20 March and 30 October 2020.
- Extension of the Coronavirus Job Retention Scheme policy paper
- Check which employees you can put on furlough to use the CJRS
- Check if you can claim for your employees’ wages through the CRJS
- Other types of employee you can claim for
- Steps to take before calculating your claim using the CJRS
- Find examples to help you calculate your employees’ wages
- Calculate how much you can claim using the CJRS
- Claim for wages through the CJRS
- Reporting employees’ wages to HMRC when you have claimed through the CJRS
- Check if your employer can use the CJRS