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In my last update a few weeks ago (click here), I wrote that we were expecting more details about the flexible furlough scheme on Friday. As anticipated, the details were announced after 5pm!
I expect that there will be mixed feelings about the changes: some businesses will welcome the ability to bring people back to work slowly and in line with business demand. Others will face difficult decisions as a result of not being able to avoid wage costs that they have been able to avoid or minimise for the past few months.
For the latter, we are running a redundancy workshop via zoom on Tuesday 23rd June. Click here for more details. For the former, we have answered some of the more commonly asked questions we have had.
From 1 July who can you furlough?
The final date by which an employer could furlough an employee for the first time was 10 June. Any employee who has already furloughed by then for a period of at least 3 weeks (with the 3 week period ending no later than 30 June) can still be furloughed under the scheme until the end of October, even if not actually on furlough leave on 30 June.
One exception was announced last week. This relates to employees returning from statutory parental leave after 10 June. Where an employee is returning from maternity, paternity, shared parental leave, adoption, leave or parental bereavement leave (which began before 10 June) after 10 June, provided that they were on their employer’s payroll on or before 19 March 2020 and their employer has claimed the CJRS grant in relation to other employees by the end of June, their employers will be able to furlough them for the first time.
For more detailed guidance about can be furloughed click here.
Is there still a minimum 3 week requirement for employee to be furloughed?
From 1 July, no. As of 1 July, the minimum period for furlough is to be removed and so from that date, employers can re-furlough employees or bring furloughed employees back to work for any amount of time and any shift pattern, while still being able to claim CJRS grant for the hours not worked. The agreed flexible furlough agreements can last any amount of time and employees can enter into a flexible furlough agreement more than once.
However, it is important to note that where a previously furloughed employee starts a new furlough period before 1 July, this furlough period must be for a minimum of 3 consecutive weeks. This is the case regardless of whether the 3 consecutive week minimum period ends before or after 1 July. For example, a previously furloughed employee can start a new furlough period on 22 June which would have to continue for at least 3 consecutive weeks ending on or after 12 July. After this, the employee can then be flexibly furloughed for any period. However, after 1 July, employers cannot make claims that cross calendar months, so the employer will need to make a separate claim for the period up to 30 June.
Although flexible furlough agreements can last any amount of time, unless otherwise specified the period that employer’s claim for must be for a minimum claim period of 7 calendar days. For more information about what to claim and when, click here.
So what work can furloughed employees do and what can employers claim?
Prior to 1 July 2020, employees on furlough cannot undertake any work for their employer but they can undertake some training. However, from 1 July, employers will be able to flexibly furlough employees which means employers can bring their employees back to work for any amount of time, and any work pattern (within the parameters of their employment contract). The employer will then still be able to claim the furlough grant for the hours the flexibly furloughed employees does not work, compared to the hours they would normally have worked in that period.
For example, if an employee usually works full time and has been furloughed from 1 July, provided that they have already been furloughed for at least 3 full weeks by 30 June, they can be asked to return to work one day a week. They can then be furloughed for the 4 days that they are not working and the employer can claim the CJRS grant in respect of the 4 unworked days’ wages. There is nothing to say that employees must work full days though and so it seems that it will be possible to ask employees to work half a day and furlough them for the other half. Administratively though this could be burdensome to manage.
However, it is worth pointing out for completeness that for any time that an employee is marked down as being furloughed, the employee must not be required to do any work for the employer.
What do you need to do to flexibly furlough employees?
Employers need to agree in advance with employees what days and hours they are going to be required to work and then confirm that for the remainder of their normal working day/week, they will be furloughed. Employers should confirm what has been agreed in writing and keep this on file for 5 years.
Of course employers do also need to ensure that such agreement is consistent with employment, equality and discrimination laws which includes ensuring that they act reasonably.
Employers will also need to keep records of how many hours employees work and the number of hours they are furloughed (i.e. not working).
Do you have to flexibly furlough employees or can you keep them furloughed for the whole of their usual working week?
There is no compulsion on employers to flexibly furlough staff and, instead, if the employer does not want an employee to do any work for them, the employer can keep them on furlough for the whole of their usual working week, until the scheme closes at the end of October. There will be an additional cost to employers though as a result of the tapering off of the grant. For a useful summary of the grant changes, click here.
Are there any working examples for how employees can be furloughed and what grants can be claimed?
Yes. The government has helpfully produced some which can be accessed by clicking here.
This summary guidance note reflects our interpretation of the guidance at the time of writing. It should not be seen as a substitute to full legal advice and we would always recommend taking advice on your specific circumstances.
If you would like to discuss the scheme in more detail or have any other questions about managing your workforce, please do not hesitate to get in touch with the employment team on 0113 849 4000 or email email@example.com