United Kingdom: COVID-19 – further extension to furlough scheme – key details

Context

The Coronavirus Job Retention Scheme (CJRS) was recently extended until December, in light of the national lockdown in England that is due to run until 2 December. The government has now announced that the CJRS will be further extended to 31 March. We discussed the initial extension here: Extended furlough scheme: is it the same as before?, noting that the extended CJRS is essentially the same as what applied in August, with two key changes:

• An employee does not have to have been previously furloughed.
• The employee has to have been on an RTI submission on or before 30 October.

We also highlighted the ability to rehire someone whose employment had terminated since 23 September 2020 and place them on furlough.

The details (contained in a policy paper) released with the announcement of the further extension of the CJRS contain three additional points to be aware of:

Employee agreement

As with the original CJRS, furlough arrangements must be agreed with each employee (or collectively with trade unions). If the employer does not have individual agreements in writing, it needs to provide written confirmation to each employee of their furlough arrangements. The new policy paper tacitly recognises that some employers may not have had time to reach agreement with their workforces before furlough had to commence, and therefore explicitly permits retrospective agreements for the purposes of the CJRS. However, these must be in place by 13 November. All employers who have furloughed staff should therefore ensure that their written agreements / confirmations have been completed by that date.

Reference pay/hours

The policy paper states that if the employee was previously furloughed, the employer should use the reference pay / hours as calculated under the original CJRS.
If the employee wasn’t previously furloughed, the employer should use the following:

• Employees with fixed salary – 80% of the wages payable in the last pay period ending on or before 30 October 2020.
• Employees whose pay varies – 80% of the average payable between (these dates are inclusive) the start date of their employment or 6 April 2020 (whichever is later) and the day before their CJRS extension furlough periods begins.

If a previously furloughed employee received a pay rise since their last period of furlough, employers should ensure that their furlough arrangements are clear what the employee will receive for any further period of furlough. If it is intended that furlough pay is limited to the amount covered by the CJRS grant, employers must be clear that this is 80% of old pay levels, not the new, increased pay.

Public details of employers

Employers who access the extended CJRS should be aware that this will be recorded in a publicly available list from December.

And finally…

As a result of the extended CJRS, the Job Retention Bonus scheme (JRB) will no longer be available. Under the JRB, employers who retained employees who had previously been furloughed until 31 January 2021 on a minimum prescribed salary would have been entitled to a bonus of £1,000 per each retained employee. Instead, a new incentive scheme will be deployed at the appropriate time.

In addition, as we mentioned in our previous alert, under the CJRS to date, there has been no restriction on giving notice of dismissal during the period that an employer is claiming the grant for the employee. There is presently no sign that this will change under the extended CJRS. However, the postponed Job Support Scheme, which had been supposed to start on 1 November and run until 30 April, did contain such a restriction.

Further guidance on the extended CJRS is due to be published on 10 November and we will report any additional key points arising from that guidance at that time.

Policy paper: Extension of the Coronavirus Job Retention Scheme