Further updates to the government's guidance on the Coronavirus Job Retention Scheme were made on 30 April 2020 and 1 May 2020.
The key changes are as follows:
- Paving the way for union or non-union representatives to undertake collective redundancy consultation, the guidance provides that they may undertake duties and activities for the purpose of individual or collective representation of employees or other workers while furloughed, so long as they do not provide services to or generate revenue for or on behalf of the employer. This also means union reps should be able to accompany employees to disciplinary hearings while furloughed.
- Employer can extend a period of furlough which has already started for any amount of time (so they don't have to bring them back and re-furlough) but the scheme end date (currently 30 June 2020) is the last day employers can claim for through the Scheme
- Company directors with an annual pay period are covered by the Scheme
- A new employer can claim under the Scheme in respect of employees of a previous business who TUPE transferred after 28 February 2020 (rather than 19 March 2020 as in previous version of the guidance)
- Where a group of companies have multiple PAYE schemes and there is a transfer of all employees from these schemes into a new consolidated PAYE scheme after 28 February 2020 (rather than 19 March 2020 as in the previous version of the guidance), the new scheme will be eligible to furlough those employees and claim the grants available under the Scheme
- Confirmation that grants under the Scheme are not state aid. The reason behind this addition to the guidance is to make clear that the Scheme shouldn't be subject to the EU controls on state aids. State aids are advantages given by the State to selective organisations and can potentially distort competition in the EU.
- For those on maternity or other forms of parental leave and pay, the employer guidance has been updated to warn that employers may need to calculate their employee's average earnings differently if the relevant employee was furloughed and started such family leave on or after 25 April 2020. Eligibility for Statutory Maternity Pay (SMP) is calculated with reference to earnings during a prescribed 8 week period. The reason behind this change is that new rules in force from 25 April 2020 provide that where statutory maternity leave begins on or after 25 April 2020, entitlement to SMP will be calculated on the employee's normal, full earnings rather than their furlough pay. The same principle applies to other forms of parental leave and pay. This helps ensure that those furloughed individuals taking a period of family-related leave are not penalised for being on furlough and therefore, are not negatively impacted by COVID-19.
- Employees on maternity leave who are getting Maternity Allowance should not also receive furlough pay. The guidance clarifies that if employees agree to go on furlough and end their maternity leave early, they must give their employer at least 8 weeks' notice and won't be eligible for furlough pay until the end of that period.
Our client guide for employers has been updated to reflect these changes.
Originally published 1 May, 2020
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
