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Update on the Coronavirus Job Retention Scheme

Most employers in the UK will have availed themselves of the Coronavirus Job Retention Scheme which was put in place in March and is now expected to run until October 2020. Employers have been able to claim 80% of the salaries of furloughed staff in order to stave off mass redundancies which would have resulted as a consequence of the national lockdown.

The scheme is expected to run in its current form until 30 June 2020. On 1 July, employers will be able to bring employees back to work on a part time basis.  Any hours of work must be paid by the employer.

 Starting on 1 August employers will now be expected to pay for pensions and NICs.

 In September, the government will pay 70% of furlough pay. The cap will reduce from £2,500 to £2,187.50.

In October, the government will pay 60% of furlough pay up to a cap of £1,875. Throughout this period, employees will still be entitled to 80% of their wages.  Because employees are not allowed to do any work for their employer during the furlough period, this means that coming back on a part time basis will necessitate either a new furlough agreement (which employees would have been given at the beginning of their furlough period)  or a side letter amending the terms of the original agreement.   An anomaly of the restrictions against employees working for their employer during furlough is that they are not precluded from working elsewhere for pay, or doing volunteer work.

Also, because of the requirement for employers to contribute to the furlough payment come 1 August, there is a great deal of anxiety now amongst employers who fear that they will not be able to afford this as they are unable to predict how and when their businesses will return to normal, or if they ever will. Therefore, it is fully expected that a significant number of employees will now face redundancy after all.  Despite the overwhelming challenges in business at the moment, normal employment law principles must still be rigorously followed, and any redundancies made must be carried out with the same care and attention as during less chaotic times. Getting it wrong can be expensive and time consuming to put right.

If you require assistance with redrafting of furlough agreements or need advice on correct redundancy procedures, please contact Robin Williams.