Following the Chancellor’s announcement earlier this month regarding the extension to the Furlough scheme, HM Treasury has now published The Coronavirus Act 2020 Functions of her Majesty’s Revenue and Customs (Coronavirus Job Retention Scheme) Direction.
In short, the fourth Treasury Direction:
- Formally extends the Coronavirus Job Retention Scheme (‘CJRS’) from 1 November 2020 until 31 March 2021.
- Sets out the detail of how the CJRS will operate between 1 November 2020 and 31 January 2021.
- Withdraws the Coronavirus Job Retention Bonus (this was a £1,000 one-off taxable payment to the employer for each eligible employee that they furloughed and kept continuously employed until 31 January 2021).
There are a number of salient points which employers should note regarding the CRJS:
- For claim periods running to January 2021, employees will receive 80% of their usual salary for hours not worked, up to a maximum of £2,500 per month.
- Employers can claim even if they, or the relevant employees, had not previously used the CJRS.
- The furlough will continue to be flexible. This will allow employees to do some work.
- An employer can furlough an employee if they are shielding in line with public health guidance.
- An employer can claim for employees on any type of employment contract, including full-time, part-time, agency, flexible or zero-hour contracts. Foreign nationals are eligible to be furloughed
- As per the old scheme, employees who have previously been furloughed continue to have their reference pay and hours based on the existing furlough calculations.
- Furloughed employees can engage in training during hours which an employer records the employee as being furloughed, as long as in undertaking the training the employee does not provide services to, or generate revenue for, the employer.
- Any employee that was employed and on the payroll on 23 September 2020 who has made redundant can be re-employed and claimed for. There is however no obligation for an employer to do so.
- HMRC will publish information about CJRS claims on the internet including the name of the employer and a ‘reasonable indication’ of the amount claimed.
- Furlough agreements must be in place before the start of the relevant claim period (but may be varied during the claim period). An agreement must be in writing and an employer will need to keep a written record for five years.
- For claim periods starting on or after 1 December 2020, an employer may not make a claim for any employee who is serving notice between 1 December 2020 and 31 January 2021.
A further Treasury Direction is expected sometime in January 2021 regarding the rules for the period 01 February 2021 to 31 March 2021.
More informationIf you require advice regarding the furlough scheme or require a written furlough agreement to be prepared, then our Employment Team would be happy to assist.
This article was written by Alex Pearce, Senior Associate in the Employment Team at Pinney Talfourd LLP Solicitors. The contents of this article are for the purposes of general awareness only. They do not purport to constitute legal or professional advice. Specific legal advice should be taken on each individual matter. This article is based on the law as of November 2020.