Cast your minds back to Halloween. Not that long ago, but in the world of employment law in 2020 a lot can change in a very few days. Whilst some of us were taking part in socially distanced trick or treating, the Government was cooking up some tricks and treats of its own. The announcement of England’s second national lockdown on the evening of 31 October 2020 came as no real surprise to anyone but what was not expected was the announcement that the Coronavirus Job Retention Scheme (the “CJRS”) was to be extended.
The CJRS, originally launched on 23 March and had been winding down since August, was due to end on 31 October 2020. Its replacement, the Job Support Scheme (“JSS”), was due to launch on 1 November. The JSS required employees to work a minimum number of hours and employers up and down the land were making plans for the next 6 months, and putting in place JSS agreements ready for 1 November. It was therefore somewhat of a surprise to discover from the PM’s announcement that the CJRS was to be extended and the JSS was being postponed.
We set out here an overview of the extended CJRS. It is not intended to be a complete guide to the CJRS. We do draw your attention to the most recent Treasury Direction and guidance listed at the bottom of this article:
- Well the CJRS is here to stay until 31 March 2021.
- The Government will provide a grant to employers of 80% of an eligible employee’s usual salary for hours not worked, up to a maximum of £2,500 per month. The £2,500 cap is proportional to the hours not worked. Employers shall remain responsible for the employer National Insurance and pension contributions. This takes us back to the level of support available under the CJRS in August, when the government had originally started to wind down the scheme.
- There are eligibility criteria for both employers and employees, but employers need not have claimed under the CJRS previously in order to claim going forward. Employees do not need to furlough for a minimum three consecutive weeks as was required when the scheme was first launched in March 2020.
- need to be on the PAYE payroll and RTI made between 20 March 2020 and 30 October 2020.
- If made redundant or have stopped working before 30 October 2020, then provided they were on the payroll on 23 September 2020, employees can be re-employed and furloughed. However, there is no obligation on the employer to do so. If you are minded to do so, please give us a call first. There are some potential risks that employers should know about before taking the decision to re-employ.
- Fixed term contracts – if expired on or after 23 September 2020 can be re-employed and furloughed. Again, there is no obligation on the employer to do so.
- Employees can be furloughed full-time or be flexibly furloughed.
- To be eligible for the grant, employers must have confirmed to their employees (or reached a collective agreement with a trade union) in writing that they have been furloughed or flexibly furloughed. Any changes to the employment contract need to be made by written agreement.
- One significant change is that from 1 December 2020 an employer cannot claim for any days which the employee is serving contractual or statutory notice. This includes, but is not limited to, those dismissed by reason of redundancy, serving notice of retirement or who have simply resigned.
- From December 2020 – HMRC will publish:
- employer names
- indication of value of the claim
- the company registration number
HMRC will not publish details if the employer can show it would result is a serious risk of violence or intimidation. If you think that may be relevant to you, please see – “Check if you can claim for your employee’s wages through the Coronavirus Job Retention Scheme” Guidance for detail of the evidence that needs to be provided to HMRC. Alternatively, give us a call: 0333 122 0000.
- The Treasury Direction (dated 12 November) (the “Current Direction”) sets out the following very short CJRS deadline days for claims to be made:
- On or before 30 November 2020 in relation to claims for furlough days up to and including 31 October 2020
- 14 December 2020 in relation to claims for furlough days in November 2020
- 14 January 2021 in relation to claims for furlough days in December 2020
- 15 February 2021 in relation to claims for furlough days in January 2021
- The government shall review the CJRS in January 2021. Any changes are likely to come into effect from 1 February 2021.
So, what happens to all those agreements entered into with employees in the expectation of the JSS launching on 1 November? The short answer is you need to take legal advice so do get in touch.
We must warn you that this area of employment law is being updated incredibly regularly and so we do strongly recommend that you check current guidance or take advice before making any decisions. We set out below links to the Current Direction as well as the various guidance.
Please contact Anne-Marie Pavitt for more information.
Treasury Direction (12 November 2020)
- Check if you can claim
- Check which employees you can put on furlough
- Individuals you can claim for who are not employees
- Steps to take before you can claim
- Calculate how much you can claim
- Claim for wages
- Examples of how to calculate wages
- Reporting employees’ wages to HMRC
- Full examples of calculating what you should claim
- Paying back furlough grants
- Holiday entitlement and pay
- Employee Guidance
- CJRS – Step by Step Guide for employers
Article Date: 19 November 2020
The data contained within this document is for general information only. No responsibility can be accepted for inaccuracies. Readers are also advised that the law and practice change from time to time. This document is provided for information purposes only and does not constitute accounting, legal or tax advice. Professional advice should be obtained before taking or refraining from any action as a result of the contents of this document.