11th November 2020

Furlough Extended, Further Details

By way of follow up to our last blog regarding the Government’s decision to extend the furlough scheme, further guidance was published last night.  It is now widely publicised that the furlough scheme (“CJRS”) has been extended to 31 March 2021.  Some of the finer points are now available in not one, not two, but thirteen (yes, 13) sets of updated guidance.  Here are our observations.

For the period between 1 November 2020 and 31 January 2021, employers will be able to claim 80% of wage costs per employee for hours not worked, up to £2,500 per month from the Government.  Employers must pay the NI and pension costs.  Matters will be reviewed in January 2021 to determine whether employers will have to contribute more than just NI and pension contributions for February and March.

Included within the updated sets of guidance are (1) “check if you can claim for your employees’ wages through the CJRS”; (2) “check which employees you can put on furlough to use the CJRS”; and (3) “calculate how much you can claim using the CJRS”.

Employers can claim in respect of employees who were employed by them as at 30 October 2020, but also for any employees who were made redundant or stopped working on or after 23 September 2020 and who are subsequently re-employed by the same employer.   It is possible for employers to retrospectively furlough an employee so as to take effect from 1 November 2020, but there is only a narrow window to agree this with employees (the deadline for retrospective furlough is Friday 13th November 2020).

As mentioned in the previous blog, there is no requirement for the employer (or employee) to have previously utilised furlough – meaning that this extended scheme is available to people who have no previous track record with furlough.  Unlike the prior scheme, there is no upper limit on how many employees a particular employer can furlough.

Employers must confirm furlough arrangements in writing with each employee, and retain these written records for 5 years.  Remember too the requirement to adhere to established employment law principles around variation of contract (and so employers are advised to have staff to sign an agreement to be furloughed).

There are a couple of features of the extended scheme that didn’t feature in the “old” scheme.  First, from December 2020, HMRC will publish names of limited companies or limited liability partnerships who made claims to the CJRS from December 2020 and beyond.  Secondly, the Government “is reviewing whether employers should be eligible to claim for employees serving contractual or statutory notice periods and will change the approach for claim periods starting on or after 1 December 2020, with further guidance published in late November.”  We will need to wait for this “further guidance”, but one possible interpretation of this sentence is that that employers wishing to make redundancies and utilise furlough for at least part of the notice period will need to do so (i.e. serve notice) before 1 December 2020.

If you are in doubt, you can speak to a member of the Blackadders’ Employment Team.

Jack Boyle, Director
Accredited by the Law Society of Scotland as a Specialist in Employment Law


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