April 2020 | Employment Law Services (ELS) LTD

Is Employee’s Written Agreement to be Furloughed Required

Posted on 21 April 20209 June 2023 by @deliver_els

On 17 April 2020, we highlighted that the latest government guidance made clear that, in addition to written confirmation by an employer, the employee’s agreement to be furloughed must also be recorded in writing in order to be eligible to claim under the CJRS and that it would not be sufficient to rely on implied consent.

Is Employee’s Written Agreement to be Furloughed Required

This position on an employee’s agreement to be furloughed in writing was re-enforced in the Treasury’s Direction to HMRC, which is the legislative source of HMRC’s power to make payments under the CJRS. Paragraph 6.7 provides an employer can only reclaim the employee’s salary, amongst other things,:

“…if the employer and employee have agreed in writing (which may be in an electronic form such as an email) that the employee will cease all work in relation to their employment.”

Based on the Treasury’s Direction, the position seemed clear, right? Well, not exactly!

Since the CJRS was first announced, there have been six iterations of the HMRC Guidance, four of which predated the Treasury Direction. The first iteration simply required the employer to notify the employee in writing that they had to stop work (but did not require the employee to agree anything, and certainly not in writing). The second to fifth iterations added a requirement that the employer keep a copy of that written notification for five years but, again, said nothing about written agreement.

The sixth iteration, issued yesterday, states:-

“To be eligible for the grant employers must confirm in writing to their employee confirming that they have been furloughed. If this is done in a way that is consistent with employment law, that consent is valid for the purposes of claiming the CJRS. There needs to be a written record, but the employee does not have to provide a written response. A record of this communication must be kept for five years.” (emphasis added)

This latest iteration is quite clearly inconsistent with the Treasury Direction and has left many Employers confused and concerned, wondering which guidance they should follow – The Treasury Direction or the latest HMRC Guidance.

Officially, the Treasury Direction overrides the HMRC Guidance, but the Guidance shows the way that HMRC intends to interpret and apply the Direction and this latest iteration, which was published three days after the Treasury Direction, makes a clear and unmistakable statement that HMRC will not require evidence of the employee agreeing in writing to stay at home in order to allow a claim under the CJRS. In fact, HMRC seems to be quite happy to accept claims for reimbursement of 80% of salary without requiring evidence of the employee’s written agreement and there is nothing to suggest that HMRC is likely to change this approach.

Theoretically, HMRC could renege on what it has repeatedly said, and refuse to pay out to employers who cannot supply an employee’s written agreement to ceasing all work for the employer? However, if it did, it would be extremely vulnerable to a judicial review claim. The re-issue of the Guidance, subsequent to the publication of the Direction, which flatly contradicts the Direction, would make HMRC’s position very difficult if it subsequently sought to deviate from its previous Guidance to Employers.

If you have not yet furloughed employees but now intend to do so, you must comply with the Treasury Direction and secure written agreement. However, if you have already furloughed employees and simply notified them in writing that they have been furloughed, consent notwithstanding, it is probably best to leave things as they are.

Support for Employers

If you are an employer and require a written furlough agreement to ensure you are compliant and eligible to claim the furlough grant, call us now on 0800 612 4772 or Contact us via our website.

Written Agreement is Needed to Qualify for CJRS Grant

Posted on 17 April 202012 June 2023 by @deliver_els

The latest government guidance on the Coronavirus Job Retention Scheme (CJRS) now states that an employee can only be furloughed if the employer and employee have agreed in writing (which may be in an electronic form such as an email) that the employee will cease all work in relation to their employment”.

Written Agreement is Needed to Qualify for CJRS Grant

For quite some time now the Employers’ CJRS guidance has stated that any decision to furlough must be made with the agreement of employees and must be confirmed by employers in writing. This wording has not changed in the latest version.

However, what has changed is that the latest government guidance now states that an employee can only be furloughed if “the employer and employee have agreed in writing (which may be in an electronic form such as an email) that the employee will cease all work in relation to their employment” (para 6.7).

This latest guidance makes it clear that, in addition to written confirmation by an employer, the employee’s agreement to be furloughed must also be recorded in writing; it will not be sufficient to rely on implied consent.

Many employers will have already secured the written agreement of those employees they have furloughed and so will have complied with this latest provision.

However, many employers will have simply confirmed in writing their decision to furlough employees but not sought their express consent, perhaps because there was an express provision in the contract of employment to impose temporary layoffs, and many will have not confirmed anything in writing. For employers who fall into either of these categories, written agreement should be sought as soon as possible in order to qualify for the CJRS grant.

There does not appear to be any requirement for the written agreement to have taken place before an employee is furloughed, so arguably obtaining it after the event is still likely to be sufficient.

Support for Employers

If you are an employer and require a written furlough agreement to ensure you are compliant and eligible to claim the furlough grant, call us now on 0800 612 4772 or Contact us via our website.

UK COVID-19 Lockdown Extended

Posted on 16 April 202012 June 2023 by @deliver_els

At the daily No 10 briefing, Foreign Secretary Dominic Raab confirmed that Lockdown restrictions in the UK will continue for “at least” another three weeks

Mr Raab went on to say a review had concluded relaxing the measures would risk harming public health and the economy.

The extension of the UK lockdown will have both immediate and longer-term implications for UK Employers, many of which have effectively been shut down since the lockdown was first introduced on 23 March, but also for many who were perhaps holding off furloughing employees in the hope the restrictions would be relaxed sooner.

Today’s announcement comes on the back of yesterday’s update to HMRC’s guidance on the Coronavirus Job Retention Scheme, in which it was confirmed that the qualifying date, when the employee has to have been on the employer’s payroll, has changed from 28 February to 19 March 2020. This brings into scope a large number of people who fell outside the scheme because they had recently changed jobs. The 19 March date is just before the Chancellor announced details of the scheme, meaning it is still effective to prevent fraudulent claims (by businesses hiring ghost employees to claim furlough payments in respect of, as those ghost employees will not have been on PAYE on 19 March).

We have updated our Coronavirus Job Retention Scheme FAQs

HMRC have also published further details of how and when Employers can access the CJRS Online Portal.

The online claim service will be launched on GOV.UK on 20‌‌ April 2020 and the only way to make a claim is online – the service should be simple to use and any support you need will be available on GOV.UK; this will include help with calculating the amount you can claim.

HMRC have confirmed that Employers can make the claim themselves, even if they usually use an agent, and that claims will be paid within 6 working days.

Information Employers will need before they make a claim

The bank account number and sort code you’d like us to use when we pay your claim.

The name and phone number of the person in your business for us to call with any questions.

Your Self-Assessment UTR (Unique Tax Reference), Company UTR or CRN (Company Registration Number).

The name, employee number and National Insurance number for each of your furloughed employees.

The total amount being claimed for all employees and the total furlough period.

In addition, Employers will need to have the following before 20‌‌ April 2020:

A Government Gateway (GG) ID and password – if you don’t already have a GG account, you can apply for one online, or by going to GOV.UK and searching for ‘HMRC services: sign in or register’.

Be enrolled for PAYE online – if you aren’t registered yet, you can do so now, or by going to GOV.UK and searching for ‘PAYE Online for employers’.

The following information for each furloughed employee you will be claiming for:

* Name
* National Insurance Number
* Claim period and claim amount
* PAYE/employee number (optional)

If you have fewer than 100 furloughed staff – you will need to input information directly into the system for each employee

If you have 100 or more furloughed staff – you will need to upload a file with information for each employee; we will accept the following file types: .xls .xlsx .csv .ods.

Support for Employers

If you are an employer affected by any of the issues being created by the outbreak of Coronavirus and require further assistance and support, call us now on 0800 612 4772 or Contact us via our website.

HMRC Furlough Portal Goes Live on 20 April 2020

Posted on 10 April 20208 June 2023 by @deliver_els

HMRC have confirmed that the CJRS Portal will go live on Monday 20th April 2020 with the first reimbursements made on 30 April.

HMRC Furlough Portal Goes Live on 20 April 2020

You’ll need to provide the following to make a claim:

The bank account number and sort code you’d like us to use when we pay your claim.

The name and phone number of the person in your business for us to call with any questions.

Your Self-Assessment UTR (Unique Tax Reference), Company UTR or CRN (Company Registration Number).

The name, employee number and National Insurance number for each of your furloughed employees.

The total amount being claimed for all employees and the total furlough period.

The claim process will be online only, and you CAN’T do this via the telephone.

To make the claim you will need the following for each employee that has been furloughed in respect of the first claim period:

National Insurance Number
Salary
National insurance contributions made by the employer
Pension contributions made by the employer
Date the employee was furloughed from

Where you run your own payroll it might also be prudent to ensure you can access your Government Gateway account for PAYE as we assume it will be through this method that the claim will be made (still to be confirmed).

We would therefore suggest you start to pull together the required information now to be ready to make the claim quickly in due course.

Some other noteworthy Furlough Scheme updates:

HM Treasury sent an email to David Johnston MP, stating that employees who are TUPEd to a new employer after 28 February will be eligible for furlough.

HMRC Customer Support tweeted that it is possible to take annual leave when on furlough, and it must be paid at full pay.

The House of Commons Library (which issues briefing notes for MPs) issued FAQs on the Coronavirus Job Retention Scheme. It doesn’t say anything new, but it’s a useful summary of the furlough scheme.

We will continue to monitor this, and the various other COVID-19 issues arising, and keep you up to date as the situation progresses.

Support for Employers

https://employmentlawservices.com/free-employment-law-advice-for-covid-19-issues/

Free Employment Law Advice for COVID-19 Issues

Posted on 6 April 20208 June 2023 by @deliver_els

Get your COVID-19 related Employment Law and HR Questions answered for FREE by a reliable and trusted Employment Law Specialist.

Are you struggling to keep up with the rapidly changing information on the the myriad of issues the COVID-19 crisis has created, such as managing self-isolating and shielding employees, sick pay obligations, furloughing employees and other staff issues that are starting to arise with staff who have already been furloughed, laid off, or who are working from home?

Why not book a FREE 30 minute consultation with our Managing Director during which you can ask questions on any employment / HR issues your business is currently facing.

Book Your Free Consultation Now

Latest Update on Furlough Scheme

Posted on 4 April 20209 June 2023 by @deliver_els

Overnight the government has published further details of the Furlough Scheme in what we presume is an attempt to address the increasing number of queries the previously published guidance left unanswered.

On Thursday 26 March 2020 we broke the news that the government would be publishing further details on the Coronavirus Job Retention Scheme, aka the Furlough Scheme, which they duly did on Friday 27 March 2020.

This latest update does go some way to providing much more clarity for Employers, but many areas remain unclear: What do ‘statutory duties’ actually cover for company directors? Are employees who TUPE into a business after 28 February covered? Can employees take annual leave when on furlough, and what should they be paid?

We hope there is further clarity provided in the coming days but in the meantime, here are the latest updates provided overnight:

CLARIFIED: 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.
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.
CHANGED: employers can reclaim 80% of fees (whatever that means) from HMRC. The previous guidance said they could not.
CLARIFIED: the 80% does not include non-monetary benefits (eg the value of health insurance or a car).
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.
CONFIRMED: Employees can be furloughed multiple times, ie they can be furloughed, brought back to work, then re-furloughed (subject to each furlough period being at least three weeks)
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.

The HMRC Portal is still not live but is expected to be available to Employers by the end of April. Full details here: Coronavirus Job Retention Scheme.

Once we have more information, we’ll update our website so bookmark our site and keep checking for updates.

Support for Employers

What UK Employers Need to Know About the Good Work Plan

Posted on 2 April 202012 June 2023 by @deliver_els

The ‘Good Work Plan’ was published on 17 December 2018 and contains a number of small, discreet changes to workplace rights. Some aspects have already been implemented but most are awaiting further government action.

To help UK Employers prepare, we summarise below the key aspects of the Good Work Plan that will come into effect from 6 April 2020.

6 April 2020: The Employment Rights (Employment Particulars and Paid Annual Leave) (Amendment) Regulations 2018 (SI 2018/1378) come into force. These regulations amend the Employment Rights Act 1996 to provide that a written statement of terms must be given on or before the first day of employment, rather than within two months of employment starting. The regulations also add to the information that must be given in the written statement to include:

the days of the week the worker is required to work, whether the working hours may be variable and how any variation will be determined;

any paid leave to which the worker is entitled;

details of all remuneration and benefits;

any probationary period; and

any training entitlement provided by the employer, including whether any training is mandatory and/or must be paid for by the worker.

In addition, they amend regulation 16 of the Working Time Regulations 1998 to increase the reference period for determining an average week’s pay (for the purposes of calculating holiday pay) from 12 weeks to 52 weeks, or the number of complete weeks for which the worker has been employed.

6 April 2020: All workers will be given the right to a written statement of terms under the Employment Rights (Miscellaneous Amendments) Regulations 2019 (SI 2019/731). These regulations amend the ERA 1996 to give all workers, rather than just employees, the right to a written statement of terms under section 1 of the ERA 1996.

6 April 2020: The “Swedish derogation” in the Agency Workers Regulations 2010 (which currently allows employment businesses to avoid pay parity between agency workers and direct employees if certain conditions are met) will be removed by the Agency Workers (Amendment) Regulations 2019 (SI 2019/724). These regulations amend the Agency Workers Regulations 2010 to remove the “Swedish Derogation” which allows employment businesses to avoid giving agency workers pay parity with comparable direct recruits if they have an employment contract which gives them a right to pay between assignments.

6 April 2020: Temporary work agencies must provide agency work-seekers with a Key Information document, including information on the type of contract, the minimum expected rate of pay, how they will be paid and by whom under the Conduct of Employment Agencies and Employment Businesses (Amendment) Regulations 2019 (SI 2019/725). These regulations require employment businesses to provide agency work-seekers with a key information document, before agreeing the terms by which the work-seeker will undertake work. The document must include information such as the type of contract under which the work-seeker will be engaged, the minimum rate of pay, any deductions that will be made to their pay, how they will be paid and by whom, and annual leave entitlement.

6 April 2020: The threshold to request an information and consultation agreement under the ICE Regulations will be lowered by the Employment Rights (Miscellaneous Amendments) Regulations 2019 (SI 2019/731). These regulations lower the threshold required for a request to set up information and consultation arrangements from 10% to 2% of employees, subject to the existing minimum of 15 employees.

6 April 2020: All termination payments above the £30,000 threshold will be subject to class 1A NICs.

6 April 2020: The off-payroll working rules will be extended to large and medium-sized companies in the private sector, as announced in the Autumn 2018 Budget.

30 April 2020: By no later than 30 April 2020, temporary work agencies must provide agency workers whose existing contracts contain a Swedish derogation provision with a written statement advising that, with effect from 6 April 2020, those provisions no longer apply.

April 2020: The Parental Bereavement (Leave and Pay) Act 2018 is expected to come into effect. A consultation on draft regulations is expected before then. Find Out More

What Should Employers Do Now?

In advance of these changes coming into effect on 6 April 2020, Employers should review their current written particulars of employment to ensure they include the additional information required under the amended legislation and that they have in place a process to ensure written particulars are issued to new employees and/or workers.

How can Employment Law Services (ELS) help?

If you are an employer who requires assistance with any of the issues raised in this blog call us now on 0800 612 4772 or Contact Us via our website.