As readers will doubtlessly be aware, the Coronavirus Job Retention Scheme (CJRS) was initially announced on 20th March and is generally known as furlough leave. Under the scheme, HMRC will reimburse employers 80% of the wage costs of employees who are not working (furloughed). This is up to £2,500 a calendar month for each employee or PAYE worker, plus the associated employer National Insurance and minimum auto enrolment pension contributions on the capped amount.
Since the initial guidance, this has been updated 4 times including today, 17th April, and on 15th April, the Chancellor issued a Treasury Direction which sets out the terms of the CJRS and takes precedence over the guidance. There are a number of inconsistencies between the direction and the updated guidance which remain to be clarified.
The main changes and updates:
- The payroll cut off eligibility date has been changed from 28th February to 19th March. This means that in order to be eligible, an employee under the scheme must have been on the payroll on 19th March 2020.
- The latest update confirms that an employee who has transferred under TUPE can be furloughed, meaning that the new employer can make the necessary claim to HMRC.
- The updated guidance makes clear that an employer can decide to furlough an employee on sick leave. In addition, the guidance advises that it is up to the employer to decide whether to move employees who become sick during furlough on to SSP or whether to keep them on furlough at their furloughed rate of pay.
- An employer can choose to furlough an employee who is unable to work because they are shielding, or because they need to stay at home with someone else who is shielding. The requirement for that employee to be otherwise redundant was removed by the 9th April update.
- The guidance also now confirms that employees returning from statutory leave, including maternity, paternity, parental or sick leave can be furloughed.
- The scheme has been extended to 30th June. This is no doubt to provide further support, but will also enable employers considering large scale redundancies to start their 45 day collective consultation in time for redundancies to be effective from 30th June.
It is unfortunate for employers, employees and their legal representatives that in an effort to get guidance out on the CJRS as soon as possible, this has been revised 4 times in quick succession and has led to further uncertainty.
The online portal is due to open on Monday 20th April and it is to be hoped that any further amendments will be to provide clarification for those using the scheme rather than to make amendments to eligibility.
The guidance still does not deal with the relationship between furlough and holidays.
We will continue to bring you further updates as and when these are available.
For advice on this or any other employment law issue please call Winston Solicitors on 0113 320 5000 or email Paul Grindley at PaulG@winstonsolicitors.co.uk
