The Government have announced that the ‘furlough’ scheme (also known as the Job Retention Scheme or JRS) is to be extended until the end of March 2021. Employers across the UK can claim, whether their businesses are open or closed. On 10 November, we were provided with further details as to how the new scheme will operate.

There are some differences to the newly announced JRS when comparing it to those arrangements in place during September and October. The scheme is now more generous, in an attempt to help businesses through the winter period, although many people will no doubt see this as an indication of a very unsettled winter for businesses and for all of us.

For claim periods running up to January 2021, employees will receive 80% of their usual salary for hours not worked, up to a maximum of £2,500 per month, which is higher than we had been seeing recently. Employers will pay NI contributions and pension payments for their employees, as well as the usual salary for hours, worked where part-time furlough arrangements are in place.

The Government have said that the JRS arrangements will be reviewed again in January 2021 for payments made in February and March 2021, so we expect there may be a tapering down of the Government contributions from January 2021, but this will very much depend on the state of the economy at that time.

We do know that employers can claim even if they, or the relevant employees, have not previously used the JRS, and the flexible furlough rules introduced in July remain in place, so employees can continue to do some work and be paid in the usual way for those worked hours. In addition, there is no maximum limit to the number of employees you can claim for.

As previously, employers must report and claim for a minimum period of 7 consecutive calendar days.

Documentation

As we have previously advised, you will need to retain written records of the agreement between you and any employee you place on the JRS. We now know that this can be done retrospectively (back to 1 November) so long as that agreement is in place before Friday 13 November. Otherwise, the default position appears to be that furlough can only be claimed from the actual date of the agreement.

Recommendations are that you should keep the written record of the agreement for 5 years, and the record of how many hours were worked and how many furloughed for 6 years.

Where an employee is fully furloughed, your agreement should state that no work can be done during that period and, whilst training is possible, revenue cannot be earnt by that individual for your business.

Holiday

Employees who are part of the JRS are able to take their annual leave in the usual way if approved by their employer. For all holiday taken during furlough, employees must be paid at their full salary rate.

Furlough is for periods where ordinarily the individual would be working, but due to the impact of the pandemic, you are not able to offer the usual working hours. Furlough is not intended to cover periods of pre-arranged annual leave exclusively, but rather periods of leave can be incorporated into a wider period of furlough.

Shielding and Sickness

Where employees are shielding in line with public health guidance (or need to stay at home with someone who is shielding) they can be placed on the JRS, but do not have to be. We recommend you speak to any shielding employees to discuss their own individual circumstances and level of risk, before making any assumptions on the requirement for furlough.

Whilst we have said earlier the JRS is not intended to deal with annual leave, neither is it intended as a way to deal with short-term sickness. If there are employees who you need to furlough that are currently off sick, you are able to treat them in the same as other employees and place them on furlough. Of course, the reason for the furlough must be a business need, and not due exclusively to their sickness absence.

Employees who are furloughed and become ill must be paid at least Statutory Sick Pay (SSP), and you will need to decide whether it is appropriate in individual circumstances to transfer them from furlough to SSP or allow them to remain on furlough.

Re-employment

Employees on the payroll on 23 September 2020 who were later made redundant, or stopped working for their employer after that date, can be re-employed and placed on furlough.

Notice Periods

You will be unable to claim for employees who are in, or commence, a period of notice (for whatever reason) after 1 December 2020.

Maternity Leave

Where employees are transferring from maternity leave to a JRS agreement, they will be required to give the statutory eight weeks’ notice to end their maternity leave early.

Name and Shame

Where limited companies and LLPs claim JRS after 1 December, they will be named online and details published of the amount they are claiming (indicative). Whilst this should not prevent the proper use of the scheme, it seems intended to have a twofold effect of reducing fraudulent claims and discouraging companies from claiming unless absolutely necessary due to potential negative PR (competitors emphasising how they aren’t using the scheme, questions about financial stability, local and national press trawling through financial records and passing comment about the use of public funds by apparently successful companies, etc.).

Job Retention Bonus and Job Support Scheme

The Job Retention Bonus (expected to be payable for those retained up to 31 January 2021) and the newly announced Job Support Scheme have been put on hold.

Further details on the new scheme can be found here.

If you are an employer or an employee who has more questions regarding the JRS or employment law, please contact one of our specialist Employment Solicitors by emailing online.enquiries@la-law.com or by calling 01202 786183