By Angela West, 20th April 2020
With the Coronavirus Job Retention Scheme On-line Portal going live today, we thought we would share with you as part of our ongoing updates, some of the changes which have been announced over the course of the weekend.
CJRS On-line Portal
It is expected that the Portal will be under immense pressure with many employers endeavouring to register their furloughed employees.
HMRC have helpfully published two new Guidance documents. One is a step by step guide for employers on how to claim under the CJRS, which also sets out information that you will need and the process you will have to follow. We would strongly recommend you have all this information ready and available before you try and get onto the portal. The second guidance document enable’s employers to calculate 80% of the employee’s wage for the purposes of claiming under the Scheme, and sets out what can/cannot be claimed as part of the 80%. For your convenience, please click here to find the step by step guide and also the link to the guide to calculating 80% of an employee’s wage.
Over the weekend HMRC have now set out further guidance for employees which covers amongst other things the question of annual leave whilst on furlough leave (interestingly the employers guidance remains ambiguous at best on this topic). Acas have also issued guidance regarding what has been somewhat of an anomaly within the CJRS legislation thus far.
CJRS & Annual Leave
Previously carrying over holiday (which was permitted under the emergency legislation) and having the possibly of 4 weeks spread over the next 2 years applied to those who were:
- Self-isolating or were too sick to take holiday before the end of their leave year;
- Those employees who have been temporarily sent home as there was no work (laid off or put on furlough); and
- That they have continued to work but that it was not reasonably practicable for them to take the holiday during the leave year.
The new ACAS Guidelines have confirmed that the carry-over is now limited to:
- Those self-isolating or were too sick to take holiday before the end of their leave year; and
- That they have had to continue working and that it was not reasonably practicable for them to take the holiday during the leave year.
Again, for convenience sake, please head to the ACAS website on all things furlough but specifically holiday.
The HMRC guidance for employees also goes on to state that holiday pay should be “your usual holiday pay in accordance with the Working Time Regulations 1998” and that “employers will be obliged to pay the additional amounts over the grant”. This guidance therefore confirms that where an employee takes annual leave while on furlough, the employer should top up the employee’s wage to 100% of normal pay.
One theme that is abundant throughout all the guidance documentation, is that both employers and employees need to be as flexible as possible on this matter.
CJRS Has Been Extended
A further development is that the Scheme has been extended to the end of June 2020 (previously the Scheme closed on the 31st May 2020). This means that furloughed employees could remain furloughed until the end of June 2020, subject of course to it being appropriate to furlough those employees.
Written Agreement To Be Furloughed
The employer’s guidance has also attempted to clarify how an employer can go about placing an employee on furlough. The guidance states that the employer must “confirm in writing to their employee that they have been furloughed, and that if this is done in a way that is consistent with Employment Law then that will constitute a valid consent for the purposes of the Scheme.” This does appear to be somewhat at odds with the Treasury Direction to HMRC which was published last week which stated that an employee can only be furloughed for the purposes of CJRS if the employer and the employee “have agreed in writing that the employee will cease all work in relation to their employment”. It would appear that an agreement not to work cannot be inferred from conduct, because it has to be in writing. Accordingly, employers who have furloughed employees but have not obtained their written agreement not to work (in reliance on the earlier versions of the guidance) may well have cause to challenge any subsequent decision either not to pay out under the Scheme or if HMRC state that the payment was made in circumstances where the employer had not properly furloughed their employees.
Since our first article on the Coronavirus Job Retention Scheme which we published on the 5th March 2020, there have been no less than 5 iterations of HMRC’s Guidance for Employers and of course a subsequent Direction from the Chancellor of the Exchequer to HMRC. This demonstrates the very fast moving nature of CJRS, and we urge employers to seek legal advice if they have any concerns or remain confused about how to legitimately furlough an employee in accordance with the Scheme.
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If you have any queries regarding the Coronavirus Job Retention Scheme or the furloughing of your employees or indeed have any other employment queries, then please do not hesitate to contact a member of our Employment Team who will be on hand and happy to assist.