The Coronavirus Job Retention Scheme (the ‘Scheme’) was announced by the Government in March 2020 in order to avoid mass redundancies during the Coronavirus pandemic by paying a percentage of the wages of employees who might otherwise have been made redundant.
From 1 July 2020, employees will be able to return to work on a part time basis and the requirement for an employee to be furloughed for a minimum of three weeks at a time will cease.
The introduction of this new ‘flexible furloughing’ will mean a number of changes for employers, including how to submit a claim and how to document the new working arrangements.
Part-Time Working
Employees can return to work part-time from 1 July 2020, with employers able to claim under the Scheme for the hours not worked.
Employers will be responsible for paying the full wage of the employee (plus pension contributions and employer National Insurance Contributions) for the hours worked. A claim under the Scheme can then be made for any hours not worked.
Where an employee is on furlough, and the employer wishes to make use of the flexible element of the Scheme, the employer must:
- decide which employees to designate for flexible furlough;
- notify those selected employees of the partial return to work;
- consider whether consultation with employee representatives is necessary; and
- agree the change with employees, and record it in writing (as discussed below).
After 1 July 2020, it will still be possible for employers to rotate employees on furlough leave, and the minimum three-week requirement will no longer exist.
Employers are able to continue to fully furlough employees after 1 July 2020. However, the changes to the Scheme were implemented with the intention of assisting employers with getting employees back to work so, where possible, employers should consider making use of flexible furlough. Employers should also note that, regardless of whether an employee is fully furloughed or not, employers will be required to make increasing contributions from August 2020 onwards.
After 1 July 2020, employers will only be able to claim for employees who have already been furloughed for three continuous weeks before 30 June 2020. This does not apply to employees who have been on statutory family leave (for example maternity leave or shared parental leave), or who have been inherited through a TUPE transfer (in some circumstances).
Furlough Agreements
A written agreement between the furloughed employee and the employer is required for the employer to make a claim under the scheme after 1 July 2020.
If the parties have already entered into a furlough agreement between 1 March and 30 June 2020 then it will need to be amended to suit flexible furloughing post 1 July 2020. Amendment is necessary, as any agreements entered into between 1 March and 30 June 2020 will prohibit the employee from undertaking any work whilst on furlough, which no longer applies.
If there is an existing furlough agreement between the parties, employers will have two options, either:
- amend the existing agreement by way of a side letter; or
- enter into a new furlough agreement which allows for flexible working.
Employers will need to keep a copy of the furlough agreement, along with any records relating to claims, for a period of at least six years.
Submitting Claims
Employers should note that any claim made under the current Scheme (ending on 30 June 2020) must be made by 31 July 2020.
From 1 July 2020, employers will submit claims in much the same way that claims have been submitted under the current Scheme. However, there will be an additional requirement to report the hours worked within the claim period, and the usual hours an employee would have worked, if not for being on flexible furlough. For example, if an employee who usually works 40 hours a week is on flexible furlough and instead works 20 hours a week, then the employer must report on both these figures when making a claim.
In order for the reporting period to be accurate, employers must claim for a period of at least a week. Claims should include details of the full amount claimed. Employers can use the CJRS Claims Calculator to assist with working this out.
Claims must only be submitted for one calendar month at a time, and claims must not straddle months, meaning that if an employer is making a furlough claim for the month of August, it must not also include claims from July or September.
For further information about the Scheme, redundancy or any other employment related matters, please contact our employment solicitors. Get in touch by emailing online.enquiries@la-law.com or if your query is urgent, please call 01202 786135.