Coronavirus FAQS

Updates

4 April

 

HMRC has updated the Coronavirus Job Retention Scheme as follows:

  • employees can start a new job whole on furlough. This means that you could receive 80% of your old wages from your old employer and 100% of your new wages from your new employer. This was not prohibited in the earlier guidance, but the new guidance expressly permits it. The guidance does say it has to be allowed under the old employment contract with your old employer, but presumably, your old employer can waive that;

  • an employer can reclaim 80% of compulsory (presumably meaning contractual) commission back from HMRC, as well as basic salary. This must only relate to commission from past sales as an employee on furlough cannot be selling while on furlough;

  • employers can reclaim 80% of fees (whatever that means) from HMRC. The previous guidance said they could not;

  • this 80% does not include non-monetary benefits, for example, the value of health insurance or a car;

  • although we knew this already, company directors can be furloughed. They can still perform their statutory duties, but they cannot carry out other work for the company;

  • employees can be furloughed multiple times, for example, you can be furloughed, and return to work, then re-furloughed (note: each furlough period must be at least three weeks;

  • employers must notify employees of their furlough status in writing (although it would have been good practice to do so, previously this was not required), and a record of this written notification for five years.

 

You can read the updated guidance here.

 

Some areas remain unclear, for example:

  • what do “statutory duties” actually mean for company directors?

  • under the Transfer of Undertakings (Protection of Employment) Regulations, are employees who transfer to a business after 28 February covered?

  • can employees take annual leave when on furlough, and what should they be paid? Here’s what I think the legal position is:

This issue of holidays will be important. For example, your employer can cancel any holidays or tell you when to take them. There are also issues about what happens to your holiday entitlement if you do not take your entitlement during the current holiday year. ACAS issued guidance on 31 March 2020 about allowing holiday to be carried over for two years to cover certain situations, including where employees who could not take holiday due to being furloughed. The guidance says that employers can ask employees to take holiday, for example, if they shut down the place of work. The case law supports this and experts believe that employers can ask employees to take holiday even during furlough periods. Those on sick leave and maternity/adoption/shared parental/paternity leave cannot be asked to take holiday, but being on furlough leave is more or less the equivalent to being on garden leave. Unless further guidance is issued by the government, there would seem to be no reason why an employer cannot ask an employee to take holiday during furlough. Finally, I know from significant litigation that employees must receive their normal pay (not furloughed pay) when on holiday which can include overtime and commission etc. provided it is regular and averaged out over the previous 12 months.

2 April 

Employees who can be put on furlough

The government has updated its guidance about employees who can be furloughed as follows:

Employees must have been on your PAYE payroll on 28 February 2020, and can be on any type of contract, including:

  • full-time employees;

  • part-time employees;

  • employees on agency contracts;

  • employees on flexible or zero-hour contracts.

 

The scheme also covers employees who were made redundant since 28 February 2020, if they are rehired by their employer.

The fact that an employee can be rehired is significant for employees who have left their employment, say to start a new job which they were unable to start, usually because the job offer was withdrawn. In effect, they can ask their old employer to furlough them. The old employer does not have to do this, but at least it gives them a choice.

31 March

 

Martin Lewis, Money Savings Expert tweeted:

“CONFIRMED: If u left a job after 28 Feb, that old employer can rehire you to furlough u. So if needed ask.

We knew this worked for those made redundant, but Treasury's just confirmed to us, this is allowed for those who left voluntarily (eg for a new job). 

Tell those affected”

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Gavin Booth

The Law at Work

19 Etive Court

Cumbernauld

Lanarkshire

Scotland

G67 4JA

The Law at Work is a not-for-profit Social Enterprise operated by Gavin Booth, specialising in employment rights advice, guidance, support and non-solicitor representation at Employment Tribunal and Regulatory Hearings in Central Scotland.

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