Summary of this week’s changes to the coronavirus job retention scheme: Update 4

2020-04-20 Jennifer Renney-Butland posted:

Covid19 update4

Keeping you up to speed with the most important changes to the job retention scheme by the government this week - this update is effective as at close of play on 17th April 2020.

The main developments this week are as follows:

  • The coronavirus job retention scheme (the furlough scheme) has been extended from 31st May 2020 to 30th June. This means that businesses considering large scale redundancies due to start today, and to finish at the end of May in line with the 45 days' collective redundancy consultation requirement, can postpone their redundancy plans by a month.
  • Employees who were employed on 19th March 2020 (previously 28th February 2020) are now eligible for furlough, provided the employer had submitted real time information payroll data by that date.
  • The Scheme is not limited to employees who would otherwise have been made redundant. It applies to any who are furloughed "by reason of circumstances as a result of coronavirus or coronavirus disease".
  • Directors who are furloughed can only undertake work to fulfil a duty or other obligation arising from an Act of Parliament relating to the filing of company's accounts or provision of other information relating to the administration of the director's company. This is a very narrow interpretation of directors' duties.
  • To claim furlough, the employer and employee must have agreed in writing that the employee will cease all work. This is significant as the previous guidance only required notification. This could mean that many employees who have already been furloughed may not fall within the meaning of the Scheme, which appears unfair and will undoubtedly be challenged in months to come.
  • The amount of salary for the employee must disregard anything which is not "regular salary or wages". So this means that performance related bonus, discretionary payments (including tips), conditional payments and any non-financial benefits should be disregarded.
  • The employer cannot claim for any salary which is "conditional on any matter", so for example this may exclude any salary payments which the parties have agreed are conditional on the Job Retention Scheme paying out.
  • We have now received some guidance on annual leave and it is possible to take annual leave while on furlough, with the employer having to 'top up' to 100% of normal pay. The guidance is silent as to whether an employer can compel an employee to take annual leave while on furlough leave and this is the subject of some debate. The HMRC Guidance also states that: "During this unprecedented time, we are keeping the policy on holiday pay during furlough under review", so watch this space.

Please feel free to contact us if you need help with any of these issues. You can email us at info@renneyandco.com with any questions.

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And we're out with update 5 - read on for guidance on updates to the furlough scheme and how holiday/annual leave htwitter.com/i/web/status/1…mg

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There have been some developments on the job retention scheme (the furlough scheme), which has now been extended totwitter.com/i/web/status/1…YB

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With changes happening on a daily basis due to #COVID19 I've had lots of questions from both employers and employeetwitter.com/i/web/status/1…Nm

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