Continual Changes: Amendment to the Furlough Scheme

From 1 December 2020, employers will no longer be able to claim under the Extended Coronavirus Job Retention Scheme (Extended CJRS) if an employee is under notice of termination. This change appears, along with a number of other amends, in the new Treasury Direction and in further updates to the Government guidance that were issued on 13 November. Though it confirms that the Extended CJRS will run from 1 November to 31 March 2021, the new Treasury Direction will only apply in its current form until 31 January 2021, when the operation of the Extended CJRS is due to be reviewed. Please see below the key points:

  1. In a significant departure from the previous operation of the CJRS, from 1 December 2020, employers can no longer claim a grant under the Extended CJRS for any day that an employee is serving contractual or statutory notice. The new prohibition on claiming under the Extended CJRS for notice periods is not limited to redundancy terminations and therefore applies whether an employee has been dismissed, has resigned or is retiring.

  2. Information about employers who make a claim under the Extended CJRS scheme in December 2020 or January 2021 will be published by HMRC (probably on gov.uk). This will include the amount (or a reasonable indication of the amount) that you have claimed. An exception may be made for employers who can show that publication would expose their workforce to “serious risk of violence or intimidation”.

  3. Agreements to place an employee on furlough under the Extended CJRS must be made before the period of furlough begins. However, they can be subsequently varied to reflect any variation agreed between the employer and the employee during the period to which the claims relate. (There is an exception permitting retrospective agreements to cover the period from 1 November to 13 November, providing the agreement was made by 13 November.)

The Treasury Direction also includes significant amounts of detail on eligibility, how to make a claim and how to calculate the amounts that can be claimed for.  On the changes today, Toni Robinson, Managing Director, commented: “The majority of people were surprised when they understood that they were able to subsidise any notice period with Furlough, many finding it distasteful, so it is not a huge shock that this benefit has been withdrawn. The only real surprise is that it was permitted in the first place and that it took so long to correct.” For more information on how the new guidance impacts your right to claim Furlough, please do not hesitate to contact NucleusHR on 07960 418494 or email toni@nucleushr.com

As with everything in 2020, the only constant is change.  If you need any assistance with catching up, keeping up or simply confirming your understanding, please do email toni@nucleushr.com or call 07960 418494, we look forward to supporting you.

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