6.04.2020

The government published updated employer guidance and employee guidance on the Job Retention Scheme over the weekend. Though more information is given on some issues in this guidance, areas of uncertainty still remain.

We are in the process of updating our FAQs to reflect the impact of the new guidance but in the meantime the headline points are as follows:

• The latest guidance for employers states the Scheme is “designed to help employers whose operations have been severely affected by Coronavirus (COVID-19) to retain their employees and protect the UK economy. However, all employers are eligible to claim under the scheme and the government recognises different businesses will face different impacts from Coronavirus”. The guidance also states that “if you cannot maintain your current workforce because your operations have been severely affected by Coronavirus you can furlough employees”. We read this as a helpful softening in the wording. In earlier versions of the guidance the Scheme was said to be available as “an alternative to redundancy, lay-off or unemployment”, whereas now it seems that businesses have some discretion over the circumstances in which they choose to furlough.

• The guidance expressly states that employees who are unable to work because they have caring responsibilities resulting from Coronavirus can be furloughed. For example, employees that need to look after children or a vulnerable person in their household can be furloughed, suggesting this is possible even if you otherwise have work for them to do.

• By contrast, the employer guidance on furloughing “shielding” employees and those who need to stay at home with someone who is shielding has been amended to clarify that they may only be furloughed if they cannot work from home and would otherwise have to be made redundant.

• The new guidance is clearer on which types of workers can be claimed for, including agency workers who are paid via PAYE, even if they are not employees, foreign nationals if they were on a UK PAYE payroll on 28 February and also company directors.

• There is some additional information on which payments can be claimed for, with an express reference to past overtime. If you operate salary sacrifice, claims must be made on post salary sacrifice earnings and you cannot include benefits provided through these salary sacrifice arrangements.

• It is now possible to re-hire and then furlough an employee who has voluntarily resigned after 28 February in order to start a new job, not just employees you had made redundant after 28 February. However, individuals do not have the right to be re-hired.

• You will still be able to reclaim under the Job Retention Scheme if an employee undertakes employment for a new employer whilst on furlough. Employees can only do this if allowed under their contract of employment with you. The employee guidance reminds employees that they will need to be able to return to work for the employer that has placed them on furlough if they decide to stop furloughing them, and that they must be able to undertake any training required by that employer while on furlough.

•  The updated guidance still does not deal with the question of holidays. However, Acas guidance states that employees can be furloughed and on holiday at the same time, but does not provide clarity about payment.

• The position of employees who fall ill or need to self-isolate during furlough leave is still not clear.

We will continue to push for clarity on these outstanding issues and keep you informed via our regular updates on the Make UK Coronavirus hub. We will consider the impact of the latest guidance in more detail in our FAQs and we recommend you read the updated version of these in addition to this summary.