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From time to time we will post news articles and announcements relating to the firm and to various legal issues that may be of interest to you.

Extended Furlough Scheme – More Detail Published

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The government have published a new Treasury Direction which sets out more information on the extended furlough scheme. This covers the scheme from 1st November to 31st January 2021. The details from 1st February until the end of March are to be addressed in a further direction at a later date, indicating it is likely there will be some changes.

The direction sets out a lot of detail on how to calculate an employee’s usual hours and pay for the purposes of making claims under the scheme, which will differ depending on the circumstances.

Some key points of difference to the scheme from before are as follows:

  • Claims cannot now be made for notice periods after 1st December 2020, so any employee who is on notice on a day after 1st December cannot be the subject of a furlough claim and the notice pay must be covered in full by the employer. Employees also cannot be furloughed if they are on unpaid leave or an unpaid sabbatical.
  • HMRC must publish information about an employer who has received payments under the scheme, including name, company number where applicable, and the amount claimed. There is an exception where HMRC is satisfied that doing so would expose the employer or its directors, employees and so on to a serious risk of violence or intimidation. The direction indicates this information must not be published after one year following its initial publication, which suggests the information will only remain publicly available for a year.
  • A claim can be made for an employee who was employed and for whom payment was notified to HMRC between 19th March 2020 and 31st October 2020. If an employee was dismissed or stopped working on or after the 23rd September 2020, they can be reinstated and claim made for them. The employee does not have to have been furloughed previously.
  • There are new deadline dates for making claims in respect of each month, which are as follows:

- For any claim relating to November 2020 – 14th December 2020

- For any claim relating to December 2020 – 14th January 2021

- For any claim relating to January 2021 – 15th February 2021

This leaves a relatively small window for making claims and may cause difficulties for employers whose usual payroll date is the middle of the month. The guidance states HMRC may accept a late claim if there is a reasonable excuse, which is stated to include being prevented from making a claim by bereavement, serious illness or disability, fire, flood, theft, computer system failure or HMRC website defect. To accept a late claim, it must also be made within ‘such further period as HMRC may allow’. Therefore it is advisable to make any claims by the deadline, and if there is a reason why this cannot be done, to make the claim as soon as possible thereafter.

  • The Direction confirms that the planned Job Retention Bonus (the £1000 payment for furloughed workers who remained in employment at the end of January 2021) is withdrawn due to the furlough scheme being extended. There is no indication that it will be reinstated at a later date.

As noted in previous blogs, if an employee is being furloughed, this must be confirmed to them in writing. If an employee has been furloughed before, it may be a case of extending the previous agreement. If an employee is being furloughed for a new period, for the first time or on a different pattern (i.e. flexible furlough rather than full furlough), there may need to be a new or amended written agreement in place.

The direction confirms that the agreement may be collective with a trade union. The agreement must cover that the employee will do no work or will not work the full amount of their usual hours. The agreement must set out the main terms and conditions upon which this will be the case and must be incorporated into the employee’s contract. Generally, this means the agreement should cover terms such as how many hours they are to work, what their pay arrangements will be, and whether there will be any effect on their other terms and conditions. Generally, the agreement should confirm that the arrangement is temporary. Any changes to terms and conditions must be made in accordance with the existing terms of the employee’s contract and employment law generally.

The agreement must be made before the beginning of the period to which the furlough claim relates, although it can be subsequently varied during the claim period, such as to increase or decrease the number of hours worked on flexible furlough. This means if an employee is being newly furloughed, there must be an agreement in place before they are furloughed. The agreement must be retained by the employer for a period of at least five years.

For assistance with this or any other employment-related issues, contact our team at MSHB today.

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