Extension of furlough scheme
On 12 May, the Government announced that the CJRS/furlough would now be extended until 31 October 2020. It then kept us hanging on until last Friday (29 May 2020) as to what that would look like; we knew it would be more flexible, that employers would need to contribute more but nothing further.
Some clarity has now been given and the Government has promised that it will release further guidance on 12 June as to flexible working arrangements for employees on furlough.
Here’s what the “furlough diary” looks like for the next couple of months:
| 10 June 2020 | Last day that an employee can be put on the CJRS for the first time – this is three weeks before the date of closure to new entrants. |
| 12 June 2020 | Government to announce more details as to the flexibility of the furlough scheme going forward. |
| 30 June 2020 | CJRS closed to new entrants. It appears employees who have been furloughed for three weeks or more prior to 10 June 2020 then returned to work can still be furloughed again after this date but the guidance could be clearer. We hope for clarification on 12 June. |
| 1 July 2020 | New flexible rules (to be announced 12 June 2020) take effect meaning furloughed employees can undertake some part-time work. |
| 1 August 2020 | Stage one of employers’ contribution changes; employers must pay the NICs and pension contributions for employees on furlough leave – they can no longer be reclaimed under the CJRS. |
| 1 September 2020 | Stage two of employers’ contribution changes; only 70% of furloughed employees costs (subject to a cap of £2,187.50) can be reclaimed under the CJRS. Employers are expected to top up the remaining 10% to 80% (and will continue to pay NICs and pension contributions as per 1 August change). |
| 1 October 2020 | Stage three of employers’ contribution changes; the CJRS will reduce its contribution by a further 10% so that only 60% of furloughed employee costs (subject to a cap of £1,875) can be claimed. Again, employers will be expected to top up the remaining 20% to 80% in addition to payment of NICs and pension contributions. |
| 31 October 2020 | CJRS closes in its entirety. |
These diary entries do not, of course, tell the whole story; issues such as bringing back employees from furlough, making suitable arrangements within the workplace, managing those employees still working from home and addressing whether redundancies will still be needed are key. They are many and complex and beyond the scope of this briefing but please do look at the other resources we have on these issues:
Statutory Sick Pay extension
The Government was relatively quick off the mark at the start of this pandemic to extend the payment of Statutory Sick Pay (SSP) to employees (subject to them meeting the qualifying criterion) who were not necessarily ill themselves but were self-isolating because they lived with someone who had shown symptoms or was ill. The payment of SSP has been extended again to take account of the Track and Trace Scheme the Government is relying on in the next stage of the pandemic. Now qualifying employees who have been notified under the Track and Trace Scheme that they have been in contact with someone who has Covid-19 will be entitled to SSP while self-isolating even if not symptomatic. The period of self-isolation is 14 days and the notification will come in the form of a text, email or phone call. Employers will probably want confirmation of this notification in some way which may be more problematic if it is a phone call. Key from the guidance is the fact that individuals who share a house with someone who has been notified will not need to self-isolate as well but should practise social distancing as far as possible within the home. Clearly, if that notified individual shows symptoms and contracts Covid-19, other individuals within the house will need to self-isolate in accordance with NHS guidance introduced at the start of the pandemic.
Treasury Direction and technicalities
The Treasury Direction of 15 April 2020 has been updated; the document is dated 20 May but published on 22 May. This second Direction has gone some way, but not all the way to resolving some discrepancies which arose between the Direction and the Government’s previous and subsequent guidance.
In terms of written furlough agreement, the Treasury has confirmed that employer and employee must agree to the employee ceasing work and there must be a written agreement by the employer (including electronic form) which specifies “the main terms and conditions upon which the employee will cease all work”. This agreement must be incorporated either expressly or implicitly into the employee’s contract and must be kept until at least 30 June 2025. The requirement for written consent by the employee has been removed. In addition, employers and employees can now agree to end a period of SSP in order to start furlough, even if the employee is still eligible for SSP. The first Direction appeared to suggest that furlough could only start when entitlement to SSP was exhausted.
Take away points
Please contact Matt Wort.
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