@deliver_els, Author at Employment Law Services (ELS) LTD

Flexible Furlough – New Treasury Direction Published

Posted on 2 July 20208 June 2023 by @deliver_els

The Chancellor has produced a third iteration of the Treasury Direction in relation to the Coronavirus Job Retention Scheme (CJRS) and this was published on Friday 26 June 2020. The new Direction sets out the rules that will apply under the amended CJRS from 1 July 2020, which allows for ‘flexible furlough’ arrangements, until 31 October 2020, when the scheme ends.

Flexible Furlough – New Treasury Direction Published

Third Treasury Direction on the UK Coronavirus Job Retention Scheme

The updated Treasury Direction which legally underpins the Coronavirus Job Retention Scheme (CJRS) and which can be read here, sets out the rules that will apply under the amended CJRS from 1 July 2020. The new rules allow for ‘flexible furlough’ arrangements, until 31 October 2020, when the scheme ends. In summary the Treasury Direction largely reflects the recent Guidance and clarifies a number of points:

Flexible furlough

From 1 July to 31 October, employers are permitted to use the CJRS flexibly. This means the scheme enables part-work/part-furlough. Employers can claim under the scheme for time furloughed and will have to pay employees normally for time spent working.

Cut-off dates

The new Direction confirms that the cut-off date for making claims under the original CJRS, as set out in the previous Directions and in force until 30 June, is 31 July.

It also confirms that a business will only be able to participate in the amended CJRS that applies from 1 July if it has made a claim under the original scheme by 31 July in respect of an employee who has been furloughed for a minimum of three weeks beginning on or before 10 June.

From 1 July, the scheme is changing from month to month. Although more than one claim can be made in a month, a claim must start and end within the same calendar month and must relate to seven or more consecutive days. An exception to the seven-day claim period is made for “orphan periods” at the beginning or end of a month.

Maximum number of employees you can claim for

The number of employees who can be claimed for post 1 July cannot exceed the maximum number in any one claim made for furlough periods prior to 1 July – the new Direction refers to this as the “high-watermark number”.

Exceptions to 10 June cut-off and “high – watermark number”

The new Direction confirms the exception to the 10 June cut-off and the “high-watermark number” for family leave returners and armed forces reservists. There is a similar exception where a TUPE transfer takes place after 10 June 2020, in relation to transferring employees who were furloughed by the transferor under the original CJRS (but who cannot satisfy the 10 June cut-off as regards the transferee). The Direction confirms that the number of these previously-furloughed, transferring employees is added to the transferee’s cap in the same way as “returning employees”.

Financial support for employers

The financial support for employers will not change until 1 August 2020. From 1 August, the government will pay 80% of wages up to a cap of £2,500 for the hours an employee is on furlough and employers will pay ER NICs and pension contributions for the hours the employee is on furlough.

From 1 September, the government will pay 70% of wages up to a cap of £2,187.50 for the hours the employee is on furlough. Employers will pay ER NICs and pension contributions and top up employees’ wages to ensure they receive 80% of their wages up to a cap of £2,500, for time they are furloughed.

From 1 October, the government will pay 60% of wages up to a cap of £1,875 for the hours the employee is on furlough. Employers will pay ER NICs and pension contributions and top up employees’ wages to ensure they receive 80% of their wages up to a cap of £2,500, for time they are furloughed.

Requirement to reach an agreement on flexible furlough

In our previous bulletin, analysing the recent Guidance on flexible furlough, we referred to the fact that the Guidance is not clear whether the agreement to flexible furlough needs to be full written agreement with employees as opposed to written confirmation / letter as has been applicable for full furlough.

The new Direction confirms the requirement to reach agreement on flexible furlough arrangements but says that the agreement only needs to be confirmed in writing by employers (which may be in electronic form such as an email). Therefore, any flexible furlough arrangements require communication and letters/ emails to employees to evidence agreement. A record of the agreement must be retained by the employer until at least 30 June 2025. As with full furlough, the agreement for flexible furlough can be by means of a collective agreement.

Employers should note that there is a new requirement that the agreement must have been made before the beginning of the period to which the CJRS claim relates – and must not be made retrospectively. However, the Direction confirms that an agreement can subsequently be varied.

Calculating wages

The Direction provides various examples of how to calculate employee wages based on usual hours and hours worked, to determine how much can be claimed under the CJRS.

The requirements are not straightforward and will have to be worked through carefully especially if the claim period does not align with a calendar month. To align with a calendar month, a furlough period may have to start mid-week. In all other cases (for example, if a furlough period started on Monday 6 July), the complex flexible furlough calculations will have to be undertaken. The government has worked through some examples and has updated its calculator on the gov.uk website to assist with hours calculations to claim the CJRS grant.

If you are considering bringing back your workforce part-time, we recommend you start planning and discussing with employees as soon as possible. Bear in mind that some employees will have childcare issues and others may be shielding or live with someone who is shielding. The government expects employers to be understanding and flexible with employees in these situations.

Purpose of CJRS / redundancy

One point on which urgent clarification is being sought is that the new Direction now says that the purpose of the CJRS is to “continue the employment of employees” which begs the question can it be used to pay notice pay or any costs associated with termination of employment? This new wording appears to contradict the Employee Guidance on the CJRS which still states, “your employer can still make you redundant while you are on furlough”. HMRC have apparently referred this question to a specialist team.

This is clearly of significance to some employers who are presently exiting people or are planning to and we will of course keep it under review.

Support for Employers

The COVID-19 pandemic and associated furlough scheme continues to present numerous and complex challenges for Employers.

If you are an Employer and require advice and support on extending full furlough, introducing flexible furlough, or are contemplating a restructure/reorganisation and/or redundancies as a result of the ongoing COVID 19 restrictions, call us now on 0800 612 4772 or Contact us via our website and we will set out clear options for you to help ensure you comply with your legal obligations.

Details of Flexible Furlough Scheme Released

Posted on 15 June 20207 June 2023 by @deliver_els

On Friday night HMRC released details of the flexible furlough scheme. The most significant change is that the minimum three-week period for furlough has been removed (as of 1 July 2020). There is no minimum period, although any claim through the CJRS portal must be in respect of a minimum one-week period (i.e. employers can only put in four claims a month, not 31).

Details of Flexible Furlough Scheme Released

The details were released in two ways; the existing guidance was updated, and three new pieces of guidance were released. It would be fair to say the way this update was released was far from helpful.

In summary, the key take-aways from the latest guidance are as follows:

There are no changes to grant levels in June.

From 1 July, employers can bring furloughed employees back to work for any amount of time and any shift pattern, while still being able to claim CJRS grant for the hours not worked.

From 1 August 2020, the level of grant will be reduced each month. To be eligible for the grant employers must pay furloughed employees 80% of their wages, up to a cap of £2,500 per month for the time they are being furloughed.

For June and July, the government will pay 80% of wages up to a cap of £2,500 for the hours the employee is on furlough, as well as employer National Insurance Contributions (ER NICS) and pension contributions for the hours the employee is on furlough. Employers will have to pay employees for the hours they work.

For August, the government will pay 80% of wages up to a cap of £2,500 for the hours an employee is on furlough and employers will pay ER NICs and pension contributions for the hours the employee is on furlough.

For September, the government will pay 70% of wages up to a cap of £2,187.50 for the hours the employee is on furlough. Employers will pay ER NICs and pension contributions and top up employees’ wages to ensure they receive 80% of their wages up to a cap of £2,500, for time they are furloughed.

For October, the government will pay 60% of wages up to a cap of £1,875 for the hours the employee is on furlough. Employers will pay ER NICs and pension contributions and top up employees’ wages to ensure they receive 80% of their wages up to a cap of £2,500, for time they are furloughed.

Employers will continue to able to choose to top up employee wages above the 80% total and £2,500 cap for the hours not worked at their own expense if they wish. Employers will have to pay their employees for the hours worked.

The timetable for changes to the scheme is set out below. Wage caps are proportional to the hours an employee is furloughed. For example, an employee is entitled to 60% of the £2,500 cap if they are placed on furlough for 60% of their usual hours. The table shows Government contribution, required employer contribution and amount employee receives where the employee is furloughed 100% of the time.

** Wage caps are proportional to the hours not worked **

	July	August	September	October
Government contribution: employer NICs and pension contributions	Yes	No	No	No
Government contribution: wages	80% up to £2,500	80% up to £2,500	70% up to £2,187.50	60% up to £1,875
Employer contribution: employer NICs and pension contributions	No	Yes	Yes	Yes
Employer contribution: wages	–	–	10% up to £312.50	20% up to £625
Employee receives	80% up to £2,500 per month	80% up to £2,500 per month	80% up to £2,500 per month	80% up to £2,500 per month

The Coronavirus Job Retention Scheme will close on 31 October 2020.

For more details, Employers can:

Check if they can claim (original employer guidance doc – – UPDATED

Check which employees they can put on furlough guidance doc – – UPDATED

Steps to take before calculating a claim using the CJRS – – NEW

Calculate how much they should claim – – NEW

Claim for their employees’ wages online – – UPDATED

Report a payment in PAYE RTI – – UPDATED

Part-furlough worked example – – NEW

Long list of worked examples – – UPDATED

Support for Employers

The COVID-19 pandemic and associated furlough scheme continues to present numerous and complex challenges for Employers.

If you are an Employer and require advice and support on the various steps you need to take to end furlough, call us now on 0800 612 4772 or Contact us via our website and we will set out clear options for you to help ensure you comply with your legal obligations.

Parents returning to work after extended leave eligible for furlough

Posted on 11 June 202012 June 2023 by @deliver_els

The Chancellor has announced that parents on statutory maternity and paternity leave who return to work will be eligible for furlough scheme even after 10 June cut-off date.

Parents returning to work after extended leave eligible for furlough

We confirmed yesterday that Employers who had not already furloughed a member of staff who they may want to furlough in the future had until yesterday (10 June 2020) to do so in order for the current three-week furlough period to be completed by Tuesday 30 June.

Today (11 June 2020) we can confirm that the Chancellor has announced that parents on statutory maternity and paternity leave who return to work in the coming months will be eligible for furlough scheme even after 10 June cut-off date.

This will only apply where they work for an employer who has previously furloughed employees and to people on adoption leave, shared parental leave, and parental bereavement leave.

Chancellor of the Exchequer Rt Hon Rishi Sunak MP said:

“When I announced these changes to the furlough scheme last month, I was clear that we wanted to do this in a fair way, that supports people back to work as the country begins to re-open following coronavirus.

But for parents returning from leave, their circumstances has meant that they are still in need of support, and I’m pleased that they will be able to receive the financial assistance they and their family will need.”

As we have confirmed previously, the Coronavirus Job Retention Scheme (CJRS) has been extended until October, with new flexibilities introduced from 1 July to support the economy by allowing furloughed employees to return to work part-time.

More details of the change will be included in updated guidance, published on 12 June.

Support for Employers

The COVID-19 pandemic continues to present numerous and complex challenges for Employers. With various other changes to the Furlough Scheme due to come into effect from 1 July, Employers should be seeking professional advice to ensure they understand their options and implement their preferred actions effectively and legally.

If you are an Employer and require advice and support on the various steps you need to take to end furlough, call us now on 0800 612 4772 or Contact us via our website and we will set out clear options for you to help ensure you comply with your legal obligations.

Deadline Day for Employers

Posted on 10 June 20207 June 2023 by @deliver_els

Employers have until today to furlough any member of staff who hasn’t already been furloughed.

Employers who have not already furloughed a member of staff who they may want to furlough in the future have until today, Wednesday 10 June 2020, to do so in order for the current three week furlough period to be completed by Tuesday 30 June. If Employers miss that deadline, they won’t be able to furlough them under the new flexible scheme.

The government guidance states: “The scheme will close to new entrants from 30 June. From this point onwards, employers will only be able to furlough employees that they have furloughed for a full 3 week period prior to 30 June.”

It would appear that this rule only applies to employees who have not been furloughed at all during the period 1 March to 30 June which suggests employers will still be able to re-furlough staff even if they have returned to work and are not furloughed as at 30 June but full details of the new scheme, which are due to be published on Friday 12 June will hopefully clarify this.

Support for Employers

Chancellor announces more details about extension to the Furlough Scheme

Posted on 30 May 20207 June 2023 by @deliver_els

Yesterday (29‌‌ May) the Chancellor announced more details about the extension to the Coronavirus Job Retention Scheme (CJRS), the key details being as follows:

Chancellor announces more details about extension to the Furlough Scheme

Flexible furloughing

From 1‌‌ July 2020, Employers have the flexibility to bring previously furloughed employees back to work part-time – with the government continuing to pay 80% of wages for any of their normal hours they do not work up until the end of August. This flexibility comes a month earlier than previously announced to help people get back to work.

Employers can decide the hours and shift patterns that your employees will work on their return and will be responsible for paying their wages in full while working. This means that employees can work as much or as little as your business needs, with no minimum time that Employers can furlough staff for.

Any working hours arrangement that Employees agree with their employee must cover at least one week and be confirmed to the employee in writing. When claiming the CJRS grant for furloughed hours, Employers will need to report and claim for a minimum period of a week. They can choose to make claims for longer periods such as on monthly or two weekly cycles if they prefer. Employers will be required to submit data on the usual hours an employee would be expected to work in a claim period and actual hours worked.

If your employees are unable to return to work, or you do not have work for them to do, they can remain on furlough and you can continue to claim the grant for their full hours under the existing rules.

Employer contributions

From August, the government grant provided through the job retention scheme will be slowly tapered.

in June and July, the government will pay 80% of wages up to a cap of £2,500 as well as employer National Insurance (ER NICs) and pension contributions for the hours the employee doesn’t work – employers will have to pay employees for the hours they work.

in August, the government will continue to pay 80% of wages up to a cap of £2,500 but employers will pay ER NICs and pension contributions – for the average claim, this represents 5% of the gross employment costs that they would have incurred if the employee had not been furloughed.

in September, the government will pay 70% of wages up to a cap of £2,187.50 for the hours the employee does not work – employers will pay ER NICs, pension contributions and 10% of wages to make up 80% of the total up to a cap of £2,500.

in October, the government will pay 60% of wages up to a cap of £1,875 for the hours the employee does not work – employers will pay ER NICs, pension contributions and 20% of wages to make up 80% of the total up to a cap of £2,500.

the cap on the furlough grant will be proportional to the hours not worked.

If you are a smaller employer, some or all of your employer NIC bills will be covered by the Employment Allowance, so you should not be significantly impacted by that part of the tapering of the government contribution.

Self-Employed Grant Scheme Extended

In addition, the Chancellor also announced the self-employed grant is being extended, with applications opening in August for a second and final grant. There will be parity with the reducing furlough scheme, paying 70% (not 80%) of average earnings up to £6,750/

Important dates for Employers

It’s important to note that the scheme will close to new entrants from 30‌‌ June. From this point onwards, Employers will only be able to furlough employees that they have furloughed for a full three-week period prior to 30‌‌ June.

This means that the final date that Employers can furlough an employee for the first time will be 10‌‌ June for the current three-week furlough period to be completed by 30‌‌ June. Employers will have until 31‌‌ July to make any claims in respect of the period to 30‌‌ June.

At the date of this announcement we are still awaiting updates to the Treasury Direction and the Employer’s Guidance and therefore this information provided by the Chancellor in his press conference should be taken with a degree of caution until the full details are published, but these headline points announced should enable Employers to start planning for the coming weeks and months.

Ending Furlough

With this additional clarity form the UK government and lockdown restrictions easing across the UK, many employers will want to start planning what a return to work from furlough might look like. To assist Employers, we have added a new section to our COVID-19 Furlough FAQs – RETURNING TO WORK FROM FURLOUGH and further guidance on our blog.

https://employmentlawservices.com/ending-furlough-what-employers-need-to-know/

Support for Employers

If you are an Employer and require advice and support on the various steps you need to take to end furlough correctly, call us now on 0800 612 4772 or Contact us via our website and we will set out a clear, step by step plan you can follow to to help ensure you comply with your legal obligations.

Ending Furlough | What Employers Need to Know

Posted on 21 May 20208 June 2023 by @deliver_els

With lockdown measures already relaxed in England, Wales and Northern Ireland, and Scotland due to announce its plan to come out of lockdown on Thursday 21 May 2020, many Employers are starting to plan for ending furlough, but what steps do Employers need to take?

What Employers Need to Know

Before ending furlough Employers will first need to undertake a risk assessment to ascertain what changes in work practices might be necessary to comply with new health and safety requirements. Where changes to work practices are necessary to comply with health and safety requirements, Employers will need to consult with the affected employees.

Employees not in groups represented by a trade union must be provided with information and consulted under the Health and Safety (Consultation with Employees) Regulations 1996 (SI 1996/1513) (Consultation with Employees Regulations), either through elected representatives or directly.

With the furlough scheme being extended to the end of October 2020, Employers now have more time to assess their staffing requirements and determine when they may wish to end furlough and how this might look operationally. Ending furlough will look different for each employer; some will expect employees to return to their place of work when furlough ends whereas others may introduce home working initially and adopt a phased approach for employees returning to the workplace.

Whether the employer can dictate the end of furlough will depend on what has been explicitly or implicitly agreed between the parties. However, the absence of an explicit right to bring furlough to an end and require employees to return to work is unlikely to be an issue in most cases because employees are likely to be in receipt of less pay while they are furloughed and may be eager to return to work given the difficulties in securing alternative employment while the COVID-19 crisis continues.

An employer should give any required period of notice specified in the furlough agreement. If no period of notice was specified, the employer should aim to give reasonable notice, depending on the particular circumstances of both the employer and the employee.

The Acas guidance states that there is no minimum period for furlough, but employers should talk to staff about any plans to end furlough as early as possible and encourage staff to raise any concerns or problems about returning to work. Employees and workers should be ready to return to work at short notice, but employers should be flexible where possible.

Support for Employers

Coronavirus Statutory Sick Pay Scheme

Posted on 19 May 20207 June 2023 by @deliver_els

The coronavirus Statutory Sick Pay Scheme launches online on 26 May 2020, which will enable employers with less than 250 employees, or tax agents acting on behalf of employers, to claim back coronavirus-related Statutory Sick Pay.

Employers are eligible to use the scheme if:

they’re claiming for an employee who’s eligible for sick pay due to coronavirus
they had a PAYE payroll scheme in operation before 28 February 2020
they had fewer than 250 employees across all PAYE schemes on 28 February 2020
they’re eligible to receive State Aid under the EU Commission Temporary Framework.

The repayment will cover up to two weeks of the applicable rate of SSP, and is payable if a current or former employee was unable to work on or after 13 March 2020 and entitled to SSP, because they either:

have coronavirus
are self-isolating and unable to work from home
are shielding because they’ve been advised that they’re at high risk of severe illness from coronavirus.

For more information about eligibility and how employers can prepare to use the scheme, Employers can visit GOV.UK and search ‘Check if you can claim back Statutory Sick Pay paid to employees due to coronavirus (COVID-19)‘.

Support for Employers

If you are an employer and require advice and support on any employment related matter, COVID-19 or otherwise, call us now on 0800 612 4772 or Contact us via our website.

Furlough Scheme Extended to October 2020

Posted on 12 May 20201 November 2023 by @deliver_els

The Chancellor Rishi Sunak has today announced the Coronavirus Job Retention Scheme (CJRS) will be extended for four months, until the end of October 2020 but in doing so, he said he will ask companies to start sharing the cost of the scheme from August 2020.

Furlough Scheme Extended to October 2020

Until the end of July, there are no changes, which will be warmly welcomed by the devolved administrations of Scotland, Wales and Northern Ireland who, unlike England, have not yet decided not to relax lockdown restrictions.

Although the scheme will continue for all sectors and regions until October, the Chancellor announced that from August to October 2020, the scheme will continue on the basis furloughed employees can be brought back part-time.

Full details will be published by the end of May.

With this additional clarity form the UK government, now is the ideal time for employers to start planning what a return from furlough might look like. To assist Employers, we have added a new section to our COVID-19 Furlough FAQs – RETURNING TO WORK FROM FURLOUGH.

Support for Employers

If you are an employer and require advice and support on any employment related matter, COVID-19 or otherwise, call us now on 0800 612 4772 or Contact us via our website.

Disciplinary & Grievance Procedures During COVID-19 Lockdown

Posted on 7 May 20207 June 2023 by @deliver_els

In early May 2020, Acas published Disciplinary and grievance procedures during the coronavirus pandemic which states that existing employment law and the Acas Code of Practice on Disciplinary and Grievance Procedures (the Acas Code) continue to apply during the COVID-19 pandemic.

Disciplinary & Grievance Procedures During COVID-19 Lockdown

The guidance notes that it is for an employer to decide if it would be fair and reasonable to carry on with, or start, a disciplinary or grievance procedure while an employee is furloughed, social distancing and other public health guidelines are being followed, or an employee is working from home. It suggests some practical measures that employers can take, depending on whether a workplace is open or not.

The guidance states that a furloughed employee can take part in a disciplinary or grievance investigation or hearing however, the participation must be voluntary (an individual must be “doing it out of their own choice”) and take place in accordance with current public health guidance.

Employers Must Proceed Cautiously

It is unclear how the Acas guidance should be read alongside the HMRC guidance and the Treasury direction, which require employees to cease all work in relation to their employment during furlough. Arguably, acting as a meeting chairperson, notetaker or even a witness could amount to “work” for the purposes of paragraph 6.1 of the Treasury direction and is providing a service for the employer contrary to the Employers’ CJRS guidance. Accordingly, following the Acas guidance could mean that an employer is unable to claim for reimbursement of an employee’s wages under the CJRS.

In practice, similar principles will apply to those that are relevant when an employee is on sick leave.

We provide detailed guidance in our Furlough Scheme FAQ’s, in the “Activities During Furlough” section.

Support for Employers

If you are an employer and require advice and support on any employment related matter, COVID-19 or otherwise, call us now on 0800 612 4772 or Contact us via our website.

Furlough Scheme: An Important Change to Eligibility for TUPE Transferees

Posted on 4 May 20208 June 2023 by @deliver_els

On 30 April 2020, HMRC published another updated version of its guidance on the Coronavirus Job Retention Scheme which will directly affect the ability of employers who inherited employees through the operation of a TUPE transfer between 28 February and 19 March 2020.

Furlough Scheme: An Important Change to Eligibility for TUPE Transferees

Under the current version of the Employers’ CJRS guidance , an employer can claim under the CJRS in respect of employees who TUPE transferred after 28 February 2020. However, between 15 April and 30 April 2020, the guidance was updated to state that an employer who inherited employees through the operation of a TUPE transfer prior to 19 March 2020 would be in the same position as any other employer in terms of eligibility.

That change put employers who inherited employees close to the 19 March eligibility cut-off at a disadvantage because eligibility under the CJRS is subject to the existence of an RTI submission notified to HMRC on or before 19 March 2020. If the inherited employees’ pay was processed for the first time in the March payroll towards the end of the month, which may have been the case where, for example, there was a TUPE transfer during early March, then the cut-off date for an RTI submission of 19 March 2020 may not be met, effectively creating a ‘black hole’ for employees who TUPE transferred between 28 February and 19 March and who weren’t notified to HMRC on an RTI submission before 19 March 2020.

Welcome Furlough News for TUPE Transferees

On 30 April 2020, the Employers’ CJRS guidance was updated to change the relevant date for TUPE transfers from 19 March 2020 back to 28 February 2020 (the date given in the guidance until it was updated on 15 April 2020 to refer to 19 March 2020).

The terms of the Treasury’s Direction, paragraphs 9.1 to 9.3 which still refer to 19 March 2020 as the relevant date, will also need to be amended to give legal force to this change but given the updated guidance for employers on checking eligibility to claim now states that “a new employer is eligible to claim under the CJRS in respect of the employees of a previous business transferred after 28 February 2020 if either the TUPE or PAYE business succession rules apply to the change in ownership.” this should now be a formality.

Support for Employers

If you are an employer and require advice and support on any employment related matter, COVID-19 or otherwise, call us now on 0800 612 4772 or Contact us via our website.