Since our last post on the Coronavirus Job Retention Scheme, the Government has fleshed out the details of how the Scheme will operate from July onwards.
This blog will dive into the concept of ‘flexible furloughing’ and explain what it means for employers and employees moving forward. The information here is correct as of 30 June.
Updates on the Coronavirus Job Retention Scheme
- the Scheme will end on 31 October but will be closed to new entrants from 30 June onwards
- from 1 July onwards, employers can ask their furloughed employees to work part-time (known as ‘flexible furloughing’) without being disqualified from the Scheme
- from 1 August onwards, employers will have to start contributing to the costs of the Scheme
You can find more information on employer contributions on our Coronavirus business legal centre.
The flexible furlough scheme
From 1 July, furloughed employees can be recalled to work for any amount of time and on any working pattern whilst remaining eligible for furlough pay. This means that an employer can ask an employee to return to work Monday and Tuesday for one week and then on Wednesday, Thursday and Friday the following week.
Any employees who were previously furloughed can be recalled to work and then be furloughed again. This is designed to grant employers with greater flexibility so that they can adjust employees’ work schedules in line with demand.
Notably, the parties must enter a new written agreement which details the flexible furlough arrangement.
Only employees who have previously been furloughed can be re-furloughed after 1 July.
This means anyone that has been furloughed for 3 consecutive weeks before 30 June will be eligible. As a result, 10 June was the last day for employees to be placed on furlough for the first time. However, parents returning from their paternity or maternity leave are exempt from the cut-off date.
Minimum furlough period
Until 30 June, employees must have been furloughed for a minimum period of 3 consecutive weeks to qualify for furlough pay. This ceases to be the case from 1 July onwards. There will be no minimum furlough period and flexible furlough agreements can last for any period of time.
Those that were furloughed on 10 June can immediately be transferred onto the updated Scheme.
However, those re-furloughed after 10 June and before 1 July must satisfy the 3-week requirement in accordance with the rules of the old Scheme. For example, if employees were re-furloughed on 22 June, they must remain furloughed until at least 13 July. During this 3-week period, they must not undertake any income-generating work from their employers.
Limit on the number of furlough employees
From 1 July, the number of employees employers claim for in a single claim must not exceed the maximum number of employees they’ve claimed for in any claim by 30 June.
For example, if an employer has submitted two claims between 1 March and 30 June, with the total number of furloughed employees being 20 and 40 respectively. The maximum number of employees the employer can furlough in one go after 1 July will be 40.
Note that employees returning from paternity or maternity leave are excluded from this limit.
Updated claim periods
The deadline for any claims that arose on or before 30 June must be made by 31 July.
From 1 July, claims must start and end within the same calendar month. Employers can now submit claims for periods starting on or after 1 July. They must be for at least 7 calendar days unless employers are claiming for the first or last few days of a month. Where this is the case, they must have already claimed for the period immediately before it.
Employers that participate in flexible furloughing will be responsible for paying their employees for the hours they’ve worked. The Scheme will cover the furloughed hours.
For example, if an employee is contracted to work 9 am to 5 pm Monday to Friday, but they are recalled to work only to work 9 am to 5 pm Monday and Tuesday, the Scheme will cover the payments for the hours that are not worked (9 am – 5 pm Wednesday, Thursday and Friday).
As such, they will have to work out the employees’ usual hours, then calculate the actual number of hours they’ve worked and the furloughed hours for each claim. The Government has provided guidance on how to calculate employees’ usual hours.
A record of employees’ work hours and furloughed hours must be kept.
The concept of flexible furloughing appears to be constructed to provide employers with the flexibility required during this period.
This may be good news for some employers as this enables them to reduce staffing costs as they adapt to customer demand. However, its attractiveness may be reduced by the need for employer contributions later down the line.
For further information on the updated Scheme, the Government has created a page with a collection of guidance materials.
- Breaking down the Corporate Insolvency and Governance Act - 10/07/2020
- Exploring the world of flexible furloughing - 02/07/2020
- Changes to insolvency law to help businesses during Covid-19 - 11/06/2020