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Update on the Government's Furlough Scheme

Here we are in November, having gone through 9 months of learning to cope with life during the pandemic. It’s such good news that the new vaccines are nearly ready to roll out, giving us all a bit of hope that we won’t enter into a second year of restrictions due to Covid!

Most employers and employees now know that the government has extended the Coronavirus Job Retention Scheme (‘CJRS’ and otherwise referred to as ‘furlough’) to the end of March 2021. Two other schemes, the Job Support Scheme and the Job Retention Bonus of £1,000 per employee kept on as at 31 January, have been withdrawn. We don’t know yet whether either of those withdrawn schemes will be reinstated at a later date.  

Since 1 November, the government's contribution under the CJRS has increased back to the support offered last August, contributing 80% of an employees’ wages for those hours/days they are furloughed, with the business only needing to make employers' NI and minimum pension contributions on the furlough grant received to cover an employee's wage for unworked hours.

However, there is one very big policy change which may catch out employers unawares. For claim periods starting on or after 1 December 2020, an employer cannot claim for any days on or after 1 December 2020 during which a furloughed employee is serving a contractual or statutory notice period for the employer. Employees who have resigned or retired, and are serving a notice period, are also caught by this provision. Employers will therefore need to bear this in mind when planning redundancies. If an employee starts a contractual or statutory notice period on a day covered by a previously submitted claim, an employer will need to make an adjustment in relation to that claim.

Another important departure from previous furlough rules is that employer information will be published by HMRC regarding furlough claims made during December 2020 and January 2021. This information will be published either by a notice on the GOV.UK website or other appropriate means, within three months from date of the claims. Such information is to include: (a) the name of the employer or the qualifying PAYE scheme; (b) the employer's company reference number if it has one; and (c) the exact amount of the CJRS claim made by the employer or a reasonable indication of that amount. I suspect the reason for publishing this information is to inform the public of any large company whose business can well afford to keep their employees on from using public funds which are obviously in short supply, which has happened in the past and which has resulted in several large corporations being named and shamed and giving the funds back.

The official Treasury guidance does keep shifting, and it is unclear if, as initially indicated by HMRC, further guidance will still be published at the end of November 2020.  The CJRS sands keep shifting, so do watch this space for further updates.

If you have any queries on CJRS, redundancies or any other employment law issue, please contact Robin Williams.

The contents of this article are intended for general information purposes only and shall not be deemed to be, or constitute legal advice. We cannot accept responsibility for any loss as a result of acts or omissions taken in respect of this article.