The Government’s updated guidance on the Coronavirus Job Retention Scheme (furlough) was released late Thursday 9 April. Once again, it’s a mixed bag; clarity on shielding employees, TUPE transfers post 28 February 2020, sick leave and pay and visa issues. However, any reference to holiday during furlough appears as scarce as all permutations of flour in our supermarkets!
Please note that this ebriefing relates to certain specifics of the guidance only and is correct at the time of writing, 14 April 2020.
Shielding employees (in line with public health guidance)
You may remember from our last ebriefing, here, that the Government had rather muddied the waters with their last update on this issue. The previous wording appeared to limit the availability of furlough for shielding employees to only those whose jobs were at risk of redundancy. Thankfully, the updated guidance is clear; shielding employees (and those who need to stay at home with someone who is shielding) can be furloughed without their role needing to be redundant.
TUPE transfers post 28 February 2020
Before the update, the status of employees who had transferred under TUPE post 28 February was a precarious one. As they were not on the transferee’s payroll on 28 February, there were excluded from being furloughed. Thankfully, for any transferring employees, the new guidance states that the transferee is now eligible to claim under the furlough scheme for transferring employees who transferred after 28 February 2020 “if either the TUPE or PAYE business succession rules apply to the change in ownership”. This makes sense as TUPE is in place to protect transferring employees and it would fly in the face of this protection to exclude them from the scheme.
Sick leave and furlough
- Where employees are on sick leave or self-isolating due to coronavirus, the Government has confirmed they should be paid statutory sick pay (SSP) (if eligible). It makes it clear that furlough leave, given its minimum three-week duration, is not intended for short-term sickness absence and should not be used to top up any SSP payments.
- Employees on sick leave can be put on furlough and should stop receiving sick pay and be moved to furlough pay. This refers to employees who are on long-term sickness absence only and not short-term as noted above.
- If an employee becomes sick whilst on furlough, they have the right to SSP. However, it is up to the employer as to whether they continue to pay them under the furlough scheme or move them onto SSP. Ultimately, it will be a matter of whether the employee receives more money on SSP than on furlough and whether they notify the employer of any sickness. The guidance is silent as to how a break from furlough for SSP affects the minimum three-week furlough period.
Holidays during furlough
- The guidance still doesn’t address whether holidays can be taken during furlough. It does state that “Employees still have the same rights at work”, but it doesn’t specifically mention holidays.
- ACAS have published guidance that states that employees on furlough "can request and take their holiday in the usual way, if their employer agrees. This includes bank holidays. Furloughed workers must get their usual pay in full, for any holiday they take."
- HMRC have also expressed a view consistent with the ACAS guidance on Twitter.
- In light of these points, our current view is that it is more likely than not that paid holiday during furlough will not prevent HMRC paying out to the employer under the scheme.
Non-UK employees and furlough
The Government has clarified that foreign nationals can be furloughed. Employees on all categories of visa can be furloughed as the grant offered to employers under the scheme will not be defined as “access to public funds”.
Pension payments
Employers will be reimbursed for the minimum automatic enrolment employer contributions of 3% on employees’ qualifying earnings based on the employee’s subsidised furlough pay. We would advise that employers retain an electronic record to demonstrate to the HMRC that this pension contribution has been made.
Practicalities of the scheme
HMRC have announced to the Parliamentary Select Committee that the online portal will be open on 20 April 2020 with the first reimbursements made on 30 April 2020; very welcome news for most employers.
To process a claim, employers will need the following;
- Employer PAYE reference number
- The number of employees being furloughed
- Names and National Insurance Numbers for the employees being furloughed
- Payroll/works number for the employees you want to furlough
- Self Assessment Unique Taxpayer Reference or Corporation Tax Unique Taxpayer Reference or Company Registration Number
- The claim period (start and end date)
- Amount claimed (per the minimum length of furloughing of three consecutive weeks)
- Bank account number and sort code
- Contact name and phone number
Employers will need to calculate the amount that is being claimed. However, HMRC will retain the right to audit all aspects of any claim. As noted in our last briefing, HMRC are requesting that records be kept for five years denoting that this right will most likely be exercised.
For more information
Please contact Libby Hubbard.
