Many are now familiar with the recent changes to the Coronavirus Job Retention Scheme (commonly referred to as the “Furlough Scheme”) but keeping track with the updated statements; guidance notes and Treasury directions issued by the Government can, for many employers, be a difficult task.
Partner Sue Dowling, head of Blandy & Blandy’s Employment Law team, highlights today’s deadline for retrospective furlough agreements.
Whilst the Furlough Scheme has been extended to 31 March 2021, the latest guidance issued by the Government is a vital read, not least due to the stipulation of today’s deadline for retrospective furlough agreements to be put in place to cover any claim for the period from 1 November.
It is the second guidance (issued on 10 November) that contains the deadline of today.
What are the important and immediate points from the above guidance?
Whilst it is best for employers to read both sets of guidance in full, the following points should be urgently considered in view of today’s deadline:
- The guidance confirms that employers can use the Furlough Scheme to claim the relevant grants as from 1 November 2020 even where they have not made a claim (relating to a particular employee or indeed at all) under the original Scheme (i.e. prior to 31 October).
- As a general rule, employers can only make a claim for employees who were on their payroll as at 30 October 2020. There are however some important exceptions to this rule.
- Employers can furlough employees for the period from 1 November 2020 provided they put a retrospective furlough agreement in place by 13 November 2020. However, the employee will need to have been actually furloughed (flexibly or fully) during this time and not working their usual hours.
As an important reminder, it is not open to an employer to unilaterally impose furlough on an employee, without his/her consent. Any changes to the employees’ contract (to place them on furlough for the first time, to extend a period of furlough; to place an employee on furlough retrospectively, and/or to reduce salary to match/cap at the furlough grant) should be agreed with the employees concerned and the employer must have confirmed to the relevant employees in writing that they have been furloughed or flexibly furloughed.
Accordingly for those employers who wish to claim a grant retrospectively for the period from 1 November, they should today:
- If they have not already done so, discuss the position with the impacted employees and seek their agreement to the (retrospective) arrangement; and
- Ideally obtain their written agreement to the (continued) furlough terms (and email would suffice if a full written agreement is not practicable) and/or
- Confirm in writing today the agreement reached with the employee. As time is short if there is no time for a full furlough agreement to be prepared, an email to the employee(s) concerned – confirming the agreement reached, should suffice.
HMRC has, as yet, not published a Treasury direction relating to the updated guidance so further information will be provided once this is available.