EMPLOYMENT BRIEFING – 11 MAY 2020: UPDATE TO CORONAVIRUS JOB RETENTION SCHEME (“CJRS”) FOR FURLOUGHED EMPLOYEES – ADDITIONAL GOVERNMENT GUIDANCE ISSUED ON 30 APRIL 2020
The Government once again updated its guidance on how the CJRS operates. The update resolved some tricky questions, which had been troubling employers and employees, but others remain unclear. This Briefing summarises four new points:
1. What are the minimum periods of furlough?
The minimum period of furlough is 3 consecutive weeks. If an employee has already been furloughed, their furlough period can be extended by any amount of time, expiring on or before end of the CJRS on 30 June 2020. When an employee returns to work, the furlough period ends. Employees can be furloughed multiple times, but each separate instance must be for a minimum of 3 consecutive weeks.
2. Can company directors be furloughed?
Yes, previous versions of the Employer Guidance had made clear that salaried directors can be furloughed by Board Resolution. The new guidance provides that directors with an annual pay period (i.e. who pay themselves once per year) can also be furloughed, provided that they meet the relevant criteria. This also covers directors of personal service companies.
Although the general rule states that employees must not do any work whilst furloughed, a furloughed director may carry out such very limited duties as are necessary to fulfil the statutory obligations that they owe to their company as directors. The Treasury Direction says that only a limited range of duties are permitted: work done to fulfil a duty or obligation arising from an Act of Parliament, relating to the filing of company’s accounts or provision of other information relating to the administration of the director’s company.
3. Can a new employer claim under the CJRS for employees of a previous business who transferred into their business under the TUPE legislation after 28 February 2020?
This question has finally been answered. Yes, the new employer is eligible to claim under the scheme if the rules under the Transfer of Undertakings (Protection of Employment) Regulations 2006 (“TUPE”) – or PAYE business succession – applied to the change in ownership. Please seek advice if this affects your business.
4. Can employees act as employee representatives whilst furloughed?
Yes, employees (whether union or non-union) can take part in individual or collective representation of employees or other workers whilst they are on furlough. Employers seeking to implement redundancy dismissals of 20 or more employees (within a 90-day period) should be mindful that specific obligations and timeframes apply. The employer must start consultation with employee representatives “in good time” and a minimum period before the first of the dismissals takes effect. The minimum periods are 30 days, where between 20 and 99 employees are to be dismissed, and 45 days, where 100 or more employees are to be dismissed.
There is no further guidance on other tricky issues, including holidays, what is meant by wages that are “conditional” (which cannot be claimed for), how to manage sick or “shielding” employees, and the ongoing concern about what evidence of employee agreement will be required etc.