Further to our update last week, official guidance has been published on the extension of the furlough scheme. Although it provides a degree of clarification on the operation of the scheme going forward, ambiguities still exist on a number of issues particularly its interaction with employee pay and notice periods.
The guidance, which will be added to later this month, covers the period from 1st November until 31st January next year, when a review of the scheme will determine whether any changes are necessary in light of the economic conditions.
The guidance confirms the central tenet of the extended scheme, as announced by the Chancellor last week, that employers will have the renewed ability to claim 80% of employees pay for hours not worked up to a cap of £2,500 per month. Employers remain responsible solely for their national insurance and pension contributions.
Employees will be eligible for the scheme if employed as of 30th October, subject to an RTI submission being provided to that affect. Equally, employees who were on their employers’ payroll as of 23rd September 2020 and subsequently made redundant can be reemployed and then claimed for. Employers will also welcome the retention of the flexibility component of the scheme, with employers able to use the scheme in this manner as and when it aligns with their business needs. There is also scope under the guidance for employers to claim retrospectively for employees pay from 1st November. They must however, act to put in place the appropriate arrangements by this Friday, November 13th. For retrospective, and all other furlough claims, this includes obtaining written agreement from the employee in question.
A big talking point employers should be aware of is the impact of the guidance on employee pay for notice periods. As it stands employers can claim a furlough grant to cover an employee’s statutory notice period, however, the guidance states that the government intends to review whether employers should be eligible to claim furlough pay for employees serving notice periods whether contractual or statutory and a ‘change’ will happen from December 1st. We await the precise details on the substance of this change later in the month, however, it is already clear this shift will have major implications for employers in terms of workforce planning considerations.
Another interesting note is that the guidance makes clear the scheme is not intended to act as a substitute for statutory sick pay in terms of short terms absences from work, but it is a matter of employer discretion whether to furlough those who are extremely clinically vulnerable to the virus. Equally, it is noted that Employers cannot claim for statutory sick pay and a furlough grant for the same employee, for the same period.
Further nuances between the updated scheme and its forerunner are that there will be no maximum number of employees that any single company can place on ‘furlough’, there will however be a published list of companies who are utilising the scheme from December 1st. We would suggest this may have been provoked by the widespread misappropriation of the scheme first time round.
Should you require advice or assistance in relation to any of the above please do get in touch with Jan Cunningham or David Mitchell in our Employment Team.