On Friday 29th May, the Government announced reforms to the Coronavirus Job Retention Scheme (CJRS). Whilst we are still awaiting the precise detail, these are the headline points:
- 10th June 2020 will be the last day that employers can place employees on furlough. This would appear to suggest that if an employee has not been placed on furlough by this date, then the employer has lost the opportunity to place that particular employee on furlough leave. Whether employers can continue to bring employees on and off furlough, effectively rotating amongst the workforce, remains to be seen.
- From the 1st July 2020, a system of flexible furlough is being introduced which means that employees will be able to work part time and be furloughed part time. The employer will be able to decide how that will work in terms of the time split.
- From the 1st August 2020, employers will have to pay the National Insurance contributions and pension contributions of employees and can no longer claim them through the CJRS.
- From the 1st September 2020, the Government will only reimburse 70% of salary (up to a maximum of £2,190) and employers will be required to top up to 70% or more depending upon what the employer has agreed in the current arrangements. This may mean that revised agreements are necessary.
- From the 1st October 2020, the Government will reimburse 60% of salary (up to a maximum of £1,875) and employers will continue to top up to whatever has been agreed.
- The furlough scheme will close altogether on the 31st October 2020.
It is anticipated that further support and advice will be given to employers on how to calculate claims, with flexible furlough (part time) to be available by the 12th June 2020. Employers should note that the current arrangements regarding notice, notice pay, and holiday pay are expected to continue. Therefore, if employees are required to take holiday whilst on furlough leave, this must be at their normal or full rate of pay. Likewise, if employees are placed upon notice of termination of employment, their notice pay must also be at their normal or pre-furlough rate.
We will continue to bring you further advice and have created advice packages on these issues. These advice packages include guidance on how to manage staff through redundancy and restructure processes as well as returning to work. These packages include all associated template letters and forms that you may require and will help to ensure that you are prepared for what the future holds as far as your employees are concerned.