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The updated CJRS scheme

If you’re confused about what happened to the new Job Support Scheme, you’re not the only one.

Forget what we told you last month about government support: the new Job Support Scheme never happened and is on hold until further notice, and the Job Retention Bonus has also been indefinitely delayed.

The Coronavirus Job Retention Scheme, known to most as the ‘furlough scheme’, is back. Just days before the Job Support Scheme was due to replace the furlough scheme, the government performed a u-turn and, at the same time as announcing a second lockdown, also informed us that the furlough scheme would be extended until December 2020.

Then, just in case we were in danger of resting on our laurels, just a few days later Rishi Sunak announced that the furlough scheme would be extended until March 2021.

 

Extended Job Support Scheme

The government published a policy paper on 5 November about the extension, which we summarised here.

On 10 November, the government updated 11 separate online pages of guidance, which set out operation of the scheme from 1 November to 31 January 2021.

The points in the policy paper remain applicable, but the guidance adds further detail and clarity (and in some places, confusion!)

 

Potential sticky wickets

With a policy paper, treasury directions and guidance on the furlough scheme all written at speed and various stages in the government’s development and announcement of policy, we are left with several areas of uncertainty.

 

What written agreement/documentation do you need to have in place with employees?

Can you rely on what you already have in place if you have furloughed employees previously?

Most employment lawyers will advise you to enter into a new written agreement with employees which sets out the exact number of hours they are required to work and be furloughed (as applicable) and for what period. That is certainly a risk minimising, belt and braces approach.

In practice that isn’t necessarily workable or a commercial approach for all employers – for example, if you need flexibility to alter working patterns and/or rotate staff. Surely the scheme anticipates the need for flexibility? The guidance states that employers must have confirmed to employees that they have been furloughed, and the employee doesn’t have to provide a written response. Conversely, the guidance also refers to making sure that the agreement is consistent with employment laws, and that to flexibly furlough employees you’ll need to agree this with employees, keep a new written agreement that confirms the new furlough arrangement and that employees can enter into a flexible furlough agreement more than once.

Ultimately it’s important to consider the documentation you already have in place in the context of the updated guidance, and keep accurate records of the hours staff in fact work and spend on furlough. If you have never flexibly furloughed employees, you will at the very least need to confirm to them in writing their flexible working arrangements. In some cases you may need to seek new agreement. It’s safest to take advice if in doubt.

 

Can you furlough employees who TUPE in to you?

You can, but the guidance published on 10 November stated only if they TUPE’d to your business on or before 1 September 2020 and they were employed by their previous employer on or before 30 October 2020. This made little sense and appeared to be a drafting error.

We tweeted HMRC who confirmed it is an error, and it should say “after” 1 September. So, provided the employee was employed by their previous employer on OR before 30 October AND transferred to the new employer on or AFTER 1 September, they can be furloughed under the extended scheme. We expect the guidance page will be corrected to reflect this, but we have a screenshot of the tweet just in case!

 

Can you furlough employees serving a notice period?

Currently, yes, but the guidance as worded suggests employers can only claim for statutory notice i.e. not for any excess contractual notice. We tweeted HMRC about this too and they clarified that employers can currently claim for both statutory AND contractual notice.

However, the government is reviewing this and may change their approach in the future. They expect to publish further guidance later this month. We’ve considered the potential implications of this in a separate opinion article, which you can read here.

 

How long must you retain copy records for?

In some places the guidance refers to keeping records for 5 years, in other places, 6 years. Of course its safest to go with the longest period and keep records for 6 years covering all information relating to furloughing employees, including:

    • Amount claimed and period for each employee
    • Claim reference numbers
    • Your calculations
    • For flexibly furloughed employees, the usual hours worked plus calculations AND the actual hours worked
    • Written agreements/notifications to employees relating to furlough and flexible furlough

What next?

As well as further guidance expected later this month concerning notice period, the government are going to review the extended scheme in January, and decide whether employers should be asked to contribute more.

The current guidance covers claim periods up to 31 January and there will be updated guidance published following the government’s review – fingers crossed it will be available ahead of 1 February!

The guidance pages

Click on the appropriate heading below to view the full government guidance: