COVID-19 | Guidance for Employers
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This information is intended to provide general guidance. If you want specific advice, please book your Free 30 minute consultation call for advice on the myriad of issues the Coronavirus crisis has created, such as managing self-isolating and shielding employees, sick pay obligations, introducing short time working and/or layoffs, and any other staff issues that arising from COVID-19.
We have collated here the key information relating to the recently extended CJRS (furlough scheme) that is intended as general advice. If you require specific legal advice, please book your Free 30 minute consultation call with one of our team of employment law specialists.
The Extended CJRS (furlough scheme)
First published: 16 November 2020
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16 November 2020: First Published
Since making its initial announcement on 5 November 2020 that the CJRS (furlough scheme) would be extended until 31 March 2021, the government published a variety of guidance documents including a Policy Paper (5 November) and the Extended Furlough Guidance (10 November), which itself was amended within 48 hours of being published. Then on 13 November, HM Treasury published its fourth Treasury Direction, which together with the previous Treasury Directions, form the legal framework for the CJRS (furlough scheme).
As the legal framework for the CJRS (furlough scheme) the fourth Treasury Direction:
- formally extends the CJRS from 1 November 2020 until 31 March 2021;
- sets out the detail of how the CJRS will operate between 1 November 2020 and 31 January 2021 (fifth Treasury Direction covering February and March 2021 to be published in due course); and
- withdraws the Coronavirus Job Retention Bonus.
Key Features of the Extended CJRS
From the plethora of existing documents published prior to the latest Treasury Direction, we were already aware that the extended CJRS would operate in many of the same ways as it operated in its original iteration until the end of August 2020, but there were some key differences between the pre-and-post extension that Employers should be aware of, namely:
- Employers do not need to have used the CJRS before to be eligible to claim a grant under the extended scheme. There is also no limit on the number of employees an employer can claim for in respect of claim periods from 1 November 2020 onwards.
- Furlough agreements must be in place before the start of the relevant claim period (but may be varied during the claim period). It should be sufficient to update an earlier furlough agreement, provided it is done before the employee is furloughed under this phase of the CJRS. There was a small window of opportunity for employers to backdate agreements, as we alerted employers to here, but this has now passed.
- Employers can claim for an employee on any type of contract who were employed and on the payroll on 30 October 2020. The employer must have made a PAYE Real Time Information (RTI) submission between 20 March 2020 and 30 October 2020 notifying HMRC of a payment of earnings for the employee. However, it is not necessary for the employee to have been furloughed before.
- Employers can claim under the extended CJRS for furloughed employees who are serving statutory notice periods during November, but the guidance remains silent on contractual notice. For claim periods starting on or after 1 December 2020, an employer cannot claim for any days on or after 1 December 2020 during which the employee was serving a contractual or statutory notice period for the employer (this includes people serving notice of retirement or resignation).
- In relation to claims for transferring employees, the updated guidance was at first unclear. However, on 12 November 2020, the guidance was corrected to clarify that it is possible for employers to make claims under the extended CJRS in respect of an employee who transfers under TUPE or the business succession rules if the employee:
- Transferred from their previous employer on or after 1 September 2020.
- Was employed by either their old or new employer on 30 October 2020.
- Was on a PAYE RTI submission to HMRC by their old or new employer between 20 March 2020 and 30 October 2020, notifying a payment of earnings for that employee.
- It is now a condition of making a claim that the employer accepts that HMRC will publish information about CJRS claims on the internet. This includes the name of the employer and a “reasonable indication” of the amount claimed. An exception may be made for employers who can show that publication would expose their workforce to “serious risk of violence or intimidation”.
Making CJRS Claims
Whilst the rules published in the latest Treasury Direction cover a wide range of issues including eligibility, furlough agreements, permitted activities during furlough, business succession (including TUPE) and publication of CJRS claimants’ details, they also cover claim periods; reference salaries and calculating the usual hours of work, the key points of which we’ve noted below:
- Employers can make claims under the extended CJRS from 11 November 2020. Therefore, any grant in respect of the period 1 to 11 November 2020 will be paid in arrears. It is possible for employers to make retrospective furlough claims for periods dating back to 1 November 2020. However, to do so, they must put in place a retrospective furlough agreement by no later than 13 November 2020. Employers will therefore need to act quickly in respect of any employees who they wish to make a retrospective claim for but do not already have an agreement with. An employee will need to have been furloughed during this time and not working their usual hours, even though the furlough agreement may be backdated.
- Claims from 1 November 2020 must be submitted by 11.59 pm, 14 calendar days after the month the employer is claiming for. If this time falls on a weekend, then claims should be submitted on the next working day. This means that claims for November 2020 must be submitted by 11.59 pm on 14 December 2020.
- HMRC may accept a claim made after the relevant deadline if the employer has a “reasonable excuse” for failing to make the claim in time and then claimed “without delay” after the excuse no longer applied. There is no indication given in the guidance of what may amount to a reasonable excuse. However, HMRC will not consider a reasonable excuse until after the deadline for making a claim has passed, meaning it will not be possible to obtain advance clearance for missing the deadline. Employers will therefore be taking a risk in delaying a claim and relying on this exemption.
- Employers will only be able to amend claims for periods after 1 November 2020 if they do so within 28 calendar days of the month the claim relates to (unless this falls on a weekend, in which case the deadline is the next working day). For example, this means that the deadline for amending a claim for November 2020 will be 11.59 pm on 29 December 2020 (accounting for the bank holiday on 28 December 2020).
The Fourth (latest) Treasury Direction
HM Treasury Policy Paper
Extended Furlough Guidance
Check if you can use the CJRS
Check which employees you can put on furlough