Updates to Coronavirus Job Retention Scheme

definition of furlough

Our Menzies Law Guide to All Things Furlough went out to you on Thursday with the caveat that Government guidelines on furlough were changing rapidly.  Just to prove it, the Government has today updated (or clarified) some aspects of its Coronavirus Job Retention Scheme (CJRS) as follows:

You can re-hire and furlough anyone

CHANGED: (this is a big change)  You can re-hire and furlough anyone who was on your payroll on 28 Feb but then left you, for any reason.  So it’s not restricted to those you made redundant.  So now it could include those you sacked for something else or who resigned.

Employees with caring responsibilities

CHANGED: Employees who are unable to work because they have caring responsibilities resulting from coronavirus (COVID-19) can be furloughed. For example, employees that need to look after children can be furloughed.

Shielding Employees

CHANGED (the part in bold): You can claim for furloughed employees who are shielding in line with public health guidance (or need to stay home with someone who is shielding) if they are unable to work from home and you would otherwise have to make them redundant.

Definitely no working at all for you while furloughed

CLARIFIED: Furloughed workers definitely cannot work for you (or volunteer for you) in any way.  The rules now say that if you have work still to be done (e.g. critical business tasks) then that will have to be done by staff who are not furloughed.

Another job while furloughed?

CLARIFIED:  Yes, employees can start a new job when on furlough (meaning they might end up earning 80% of the old salary and 100% of a new one).  This was not prohibited in the earlier guidance, but the new guidance expressly allows it.  The guidance does say it has to be allowed under the old employment contract, but presumably the old employer can waive that.

Commission pay

CLARIFIED: an employer can reclaim 80% of compulsory (presumably meaning contractual) commission back from HMRC, as well as basic salary.  This is good news for car salesmen and estate agents.  But it can only be referring to the commission from past sales as the furloughed employees cannot be completing new sales when on furlough.

‘Fees’

CHANGED: employers can reclaim 80% of fees (whatever that means) from HMRC.  The previous guidance said they could not.

Benefits

CLARIFIED: the 80% does not include non-monetary benefits (e.g. the value of health insurance or a car).

Company Directors

CLARIFIED (although we all knew this anyway):  Company directors can be furloughed. They can still perform their statutory duties, but not other work for the company.

Re-furloughing or rotating

CONFIRMED: Employees can be furloughed multiple times, i.e. they can be furloughed, brought back to work, then re-furloughed (subject to each furlough period being at least three weeks).

Written confirmation

NEW: Employers must notify employees of their furlough status in writing (the previous guidance did not require it be in writing) and keep the record of that written notification for five years.

Still no official news on holiday leave…

However, the clever money (i.e. every QC’s blog that we’ve read in recent days) definitely seems to be on the idea of you allowing annual leave to be taken during furlough and paying normal (full) pay for those days, and that this won’t invalidate the furlough.  We’ve also seen a very good argument by leading lawyers that says you probably can’t instruct staff not to take holidays during furlough or to postpone them.

 

We will continue to update you as things change but if you need help or guidance on a specific issue,  please contact us on 0117 325 0526 /

 

definition of furlough