With legislation published at such a pace, it was inevitable that the Coronavirus Job Retention Scheme would not answer every question at the outset. With clarifications and further announcements from the Chancellor this week, my attention once again turns to the Furlough Scheme.
Scheme extended to the end of October 2020
The current scheme was due to finish at the end of June but will now be extended until the end of July. Thereafter a revised furlough scheme will be in place until the end of October 2020. The construction of the scheme for the months of August, September and October are as yet unclear however the government has stated that “new flexibility will be introduced from August to get employees back to work and boost the economy”. The Chancellor also said that from August he would ask companies to “start sharing” the cost, indicating that a winding down of the scheme is likely.
Further details of the post-July scheme are due to be announced before the end of May.
Employee relations
For employers who recognise trade unions, we can now say that collective agreement reached with a trade union is acceptable evidence that a furloughed employee has agreed to be furloughed. The extension of the scheme will likely give rise to further talks between unions and employers.
Furloughed employees can participate in individual or collective representation of employees or other workers whilst they are furloughed, for example redundancy consultation.
The position for those on fixed-term contracts has been clarified and they can be furloughed. If the fixed-term contract has not already expired, it can be extended or renewed and the worker can be furloughed – so long as an RTI payment was notified to HMRC on or before 19 March.
Furlough claims
HMRC’s portal through which claims are made went live on 20 April. By the end of day one, 185,000 employers had submitted claims; 1,300,000 workers had been confirmed as furloughed and claims totalled £1.5bn.
It is up to the employer to determine the length of each claim period, based on their payroll frequency. They need to ensure they include all of the employees they want to furlough for each claim period as they are unable to make another claim for the same period or one that overlaps with it. Currently, it’s not possible to amend a claim once submitted (although HMRC is looking at this) so diligence is recommended.
Not surprisingly, it’s clear that HMRC will check claims made through the scheme and those based on inaccurate or dishonest information, or found to be fraudulent will need to be repaid in full to HMRC. HMRC is urging anyone who believes their employer is fraudulently claiming to use its digital reporting service and over 800 reports have already been made.
“We expect this is just the tip of the iceberg. In this time of unprecedented change, when people are really worried about their jobs it’s a really difficult thing to stand up and say ‘I think you’re committing fraud and I’m going to report you’.”
Liz Gardiner, CEO of Protect
Holidays and furlough
Updated guidance confirms that the usual laws on holiday apply and so the Working Time Regulations (“WTR”) rules on calculating holiday pay will continue to apply during furlough. So, if an employee takes holiday during furlough, the employer will have to top up to their pay and this cannot be reclaimed from HMRC.
Furloughed employees continue to accrue holiday in the normal way although by agreement their holiday entitlement can be reduced, however not below the 5.6 weeks’ entitlement under WTR.
With another bank holiday just around the corner remember that for employees who don’t normally work bank holidays, their pay must be topped up to full holiday pay or a day in lieu given. Employees who normally work on bank holidays should continue to be paid under the furlough scheme.
Employers can continue to compel employees to take holiday so long as they give the requisite notice which is twice the length of the holiday period. So for example, if the employer wants an employee to take two weeks’ holiday they must give four weeks’ notice. If the employer wants to stop an employee from taking holiday then they need to give the required notice under WTR, that being the same number of days as the holiday the employee wanted to take, for example, 5 days’ notice to prevent or cancel 5 days’ holiday.
Finally, on holiday, remember the temporary arrangements which allows employees to carry forward up to 4 weeks’ holiday into the next 2 holiday years.
And finallly
The Coronavirus Job Retention Scheme is keeping HR, employment lawyers and employee relations professionals on their toes. With continual updates and changes do bear in mind that what’s written here could change.
Do get in touch if you want to discuss anything in this blog, or any other employee relations matter.