Furlough grant may not cover future notice payments
The Government has now published its Guidance documents on the extended Job Retention (Furlough) Scheme, which will now run to 31st March 2021.
There are 13 guidance documents in total, all of which can be accessed here (for anyone interested).
The main points clarified are:
- This extended scheme is available to all employees who were employed by their employer as at 30th October 2020 and for whom the employer had made an RTI submission to HMRC before that date;
- That employees do not have to have been previously furloughed to be included within the extended scheme;
- Employees can be furloughed for any amount of time and for any work pattern;
- There is no maximum number of employees that an employer can claim for.
- Employees who were made redundant on or after 23rd September can be re-hired and placed onto furlough, with the furlough grant being claimed for them up to 31st March 2021.
- That the 80% grant, capped at £2,500 per month, will be available until 31st January 2021 (it will be reviewed in January and possibly reduced to 70% and then 60% as it was in September and October this year)
Importantly for employers who may be considering redundancies, or looking to re-hire dismissed workers and to place them on furlough (but potentially make them redundant at a later date), the government has indicated that it is currently reviewing the ability of employers to claim grants under the Scheme for employees who are on their contractual or statutory notice periods.
The guidance indicates that the government will change its current approach for claim periods starting on or after 1st December 2020. Currently, employers can claim the furlough grant for employees who are on their notice periods, although employers must top up and pay the employee 100% of their normal pay.
This now looks set to change, and employers therefore need to understand that if they are considering making furloughed staff redundant, it is likely that from 1st December they will have to fund the full amount of any notice payments and will not be able to claim any furlough grant for those periods.
Specialist legal advice for employers
We have various templates for agreeing flexible or full furlough with staff, so if you need any help communicating the changes or obtaining their agreement, then do please get in touch.