Legal Issues – Furlough Update

Following the recent trend of regular and unpredictable changes to Government support, the Chancellor announced today that the Coronavirus Job Retention Scheme (CJRS…or “the furlough scheme”) will continue until 31 March 2021.

Continuing the provisions announced last weekend, claims for any periods up to 31 January 2021 will see employees get 80% of their usual salary for hours not worked, up to a maximum of £2,500 per month.   Any hours worked by employees will be paid by employers as usual as CJRS can be flexible or full time and it is for employers and employees to agree terms.  As a heads up for future changes, it has been made clear that the percentage may be reviewed for February and March and that may well be optimistic thinking by the Government hoping the scheme can be curtailed in the same way it was in September and October. As we know, that did not work last time so we have to hope it is more successful with the next attempt.

As with all recent announcements, we only have headlines and full guidance is due to be published on 10 November 2020.

Interestingly and almost certainly in response to widespread opinion, employees that were employed and on the payroll on 23 September 2020 who were made redundant or stopped working for their employer after that date can be re-employed and claimed for.  That will not catch everyone who has been made redundant but it does at least go some way to rectifying the problems from previous changes.

From the announcement, what we do know is:

  • Employers can claim even if they, or the relevant employees, had not previously used the CJRS.
  • Employees who have previously been furloughed will use the same reference for pay and hours to simplify administration.
  • Pay calculations are likely to be based on 80% of the wages payable in the last pay period ending on or before 30 October 2020 or 80% of the average payable between the start date of their employment or 6 April 2020 (whichever is later) and the day before their CJRS extension furlough period begins.
  • Employees can be furloughed if they are shielding in line with public health guidance (or need to stay at home with someone who is shielding). That does not, of course, mean they have to be furloughed.

Finally, while initial interest seemed limited anyway, it has been confirmed that both the Job Support Scheme and the Job Retention Bonus have been put on hold.  For a variety of reasons there is every chance they will never be used but we will see what happens in due course.

If you have any questions on any of the issues mentioned in the above article, please contact Russell Eadie.

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