News & Insight

Newsletter April 17, 2020
Furrows continue to be ploughed in furlough: updates to the furlough scheme

Furrows continue to be ploughed in furlough: updates to the furlough scheme

At the beginning of this April of 2020, we summarised the workings of the UK government’s Coronavirus Job Retention Scheme, AKA “furlough”.  Since then, the government has had more to say which we have summarised as follows:

  • The qualifying date, when the employee has to have been on the employer’s payroll, has changed from 28 February to 19 March 2020. Large numbers of people who fell outside the scheme because they had recently changed jobs are now within the scope of the scheme. However, the employer must have submitted real time information payroll data by 19 March 2020.
  • The government has extended the furlough scheme from 31 May 2020 to the end of June to reflect continuing social distancing measures.
  • To claim furlough, the employer and employee must have agreed in writing that the employee will cease all work. This is a significant change as the guidance only required notification.
  • As well as employees, the grant can be claimed for any of the following groups, if they are paid via PAYE:
    • office holders (including company directors);
    • salaried members of limited liability partnerships;
    • agency workers (including those employed by umbrella companies); and
    • limb (b) workers (a definition of the term is available under Section 230(3)(b) of Employment Relations Act 1996).
  • The guidance now states that it is possible to take holiday while on furlough, but employees must be paid 100% of normal pay during periods of holiday.
  • The guidance doesn’t clarify whether employers can require an employee to take holiday while on furlough. Until further guidance is published, our view is that this should be possible.
  • Employees can be furloughed more than once, i.e. they can be furloughed, brought back to work, then re-furloughed (but each furlough period must be at least three weeks).
  • Employers are free to switch employees from sick pay to furlough and vice versa, although this should not be abused by using furlough to “top up” small amounts of SSP for short term absences. Also, there is clarification that employers can furlough “shielding” employees, and they do not have to be placed on sick pay.
  • A furloughed employee can take part in volunteer work, if it does not provide services to or generate revenue for, or on behalf of the employer or a linked or associated organisation.
  • Furloughed employees can engage in training, as long as in undertaking the training the employee does not provide services to, or generate revenue for, or on behalf of their employer or a linked or associated organisation.
  • A new employer is eligible to claim under the scheme in respect of the employees of a previous business transferred after 19 March 2020 if either the TUPE or PAYEbusiness succession rules apply to the change in ownership.
  • We understand that the portal for submitting claims will be open from 20 April 2020 and that the first payments to employers will be made on or around 30 April 2020.

We will continue to follow the implementation of the furlough scheme and comment on the practicalities as well as the difficulties faced by businesses seeking to take advantage of it.

This piece was prepared by Lucy Ganbold and Amy Cunningham, and do reach out to either of them if you have questions about furlough or employment law questions in general.

All the thoughts and commentary that HLaw publishes on this website, including those set out above, are subject to the terms and conditions of use of this website.  None of the above constitutes legal advice.  None of the above should be relied upon.  Always seek your own independent professional advice.

Humphreys Law

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