The Treasury, in exercise of the powers conferred by sections 71 and 76 of the Coronavirus Act 2020, has issued directions on the Coronavirus Job Retention Scheme (the “Scheme”):
- The Scheme has now been extended to employees who were employed on 19 March 2020 (previously 28 February 2020)
- the employer and employee must have agreed in writing (which would include an email exchange) that the employee will cease all work in relation to their employment
- the amount of salary for the employee must disregard anything which is not "regular salary or wages" and the directions specifically exclude performance-related bonuses, conditional payments and tips and other gratuities.
In the current uncertain times, with the Coronavirus lockdown and impact this has had on businesses, the Government has introduced The Coronavirus Job Retention Scheme to try and safeguard jobs. It is a temporary scheme which will have back-dated effect from 1 March 2020 and will run for at least three months, to 31 May 2020. As it is a new scheme, the Government are having to design both it and the implementation system from scratch but the hope is that it will be up and running by the end of April 2020.
In updated Guidance issued by the Government on Friday evening, they have stated that an employee can be furloughed multiple times. That is, they can be furloughed, brought back to work, then re-furloughed (as long as each furlough period is at least three weeks). This would allow employers to rotate employees who are on furlough. While this would add to the employer’s administration, it may be beneficial from an industrial relations point of view. Subject to the final legislation, we understand:
- the 80% is based on the higher of (i) the earnings in the same pay period in the previous year; or (ii) the average earnings in the previous 12 months (or less, if they've worked for less).
- employees taken on after 1 March 2020 are excluded from the scheme.
- businesses can re-employ people who have been made redundant since 1st March, and then furlough them.
- to qualify for the payment, an employee must be furloughed for a minimum of three weeks.
- Employers will be able to rotate staff weekly between furlough and non-furlough, which may assist in industrial relations.
- Employees on furlough leave can undertake volunteering work or training, providing it does not generate any money for their employer.
If an employee is placed on short-time working/reduced hours rather than furlough, the employer will not be able to claim under the furlough scheme in relation to that employee.
If you wish to furlough an employee, or are an employee whose employer wishes to furlough them, we are here to help you through the process. Employers need to follow employment law to protect themselves against any unfair dismissal and/or discrimination claims. Please contact Alison Gair on 0118 912 0300.