On 12 June 2020, as anticipated HMRC set out further detail of the previously announced changes to the Coronavirus Job Retention Scheme (CJRS). These changes will take effect from 1 July 2020.
Please note: the information contained in our legal updates are correct as of the original date of publication
On 12 June 2020, as anticipated HMRC set out further detail of the previously announced changes to the Coronavirus Job Retention Scheme (CJRS). These changes will take effect from 1 July 2020.
Employees will no longer have to avoid doing any work at all for their employer, but can work and not work in proportions to be determined between the employer and employee. The employer will still be able to claim the CJRS grant, at 80% of their salary (subject to the previous cap), for those hours the employee does not work where they normally would do so.
The steps for calculating furlough pay under the flexible furlough scheme are complex. Helpfully, the updated guidance includes several examples plus a calculator to assist employers calculate their claim. The remainder of the update can be summarised as follows.
The employer can only submit a claim if they have previously successfully submitted a claim for the same employee in relation to a three-week furlough period between 1 March 2020 and 30 June 2020. However, this cut off does not apply for employees who started certain parental leave (maternity, paternity, shared parental, adoption or parental bereavement leave) before 10 June 2020 and returned after 10 June 2020, as long as they were on PAYE payroll as at 19 March 2020, and the employer has furloughed other employees for a three week period between 1 March 2020 and 30 June 2020.
The employer must liaise with their employees to decide those hours they will work.
If the employee is fully furloughed
The employer does not need to work out the employee’s usual and furloughed hours. The employer should work out the maximum wage amount.
If the employee is flexibly furloughed
The employer must work out the employee’s usual hours (see below for further details) and record the actual hours they work, as well as their furloughed hours, for each claim period.
The guidance contains examples to assist with working out usual hours and furloughed hours.
The split of working hours and furloughed hours will need to be agreed with the employee and should be confirmed in a written agreement (or the employer must reach collective agreement with a trade union). It would be prudent for the employee’s agreement to also be recorded in writing. This record must be kept for five years.
Even if the employer already has written confirmation of furlough arrangements with furloughed employees, the employer must additionally confirm in writing if they are to be moved to flexible furlough arrangements. Similarly, if the employee’s working hours change again from those hours originally agreed, the employer must have something new in writing to cover that arrangement.
The number of employees the employer can claim for in any claim period from 1 July 2020 onwards must not exceed the number of employees claimed for under any single claim ending by 30 June 2020. This may impact on those employers who have rotated employees on furlough each month but were then hoping to flexibly furlough all those who had been previously furloughed. The exception regarding employees on parental leave applies.
The employer can choose to continue to fully furlough employees until 31 October 2020, although the cost sharing regime takes effect from 1 August 2020.
The three-week minimum requirement will be removed - as of 1 July 2020, flexible furlough arrangements can last for any amount of time (except where the employee is part way through a three-week furlough period which commenced prior to 1 July 2020).
However, the minimum claim an employer can make is for one week (unless the claim is for the first or last few days of the month, as explained below).
From 1 July 2020 onwards, claim periods must start and end within the same calendar month. The exception is where a claim is for a period including the first or last day of the month, and the employer has already claimed for the period ending immediately before it – in which case, the claim can relate to a period of fewer than 7 days.
The employer should try to match the claim period to the dates they process their payroll. The employer can only make one claim for any period so must include all furloughed or flexibly furloughed employees in one claim, even if they are paid at different times.
Claims cannot overlap: if making more than one claim, subsequent claims must not overlap and where employees have been furloughed or flexibly furloughed continuously (or both), the claim periods must follow on from each other with no gaps in between the dates.
Claims for periods ending on or before 30 June 2020 must be made by 31 July 2020. Employers cannot make any claims for July until 1 July 2020.
Fixed hours/pay
The employer must use the number of hours the employee worked in the pay period before 19 March 2020.
Variable hours/pay
The employer must take the higher of:
“Normal working hours” must include any hours of leave for which the employee was paid their full contractual rate and any hours worked as overtime (where payment for working overtime was not discretionary).
In short, the rules on this have not changed: employees continue to accrue annual leave during furlough (whether full or flexible) and can take annual leave during furlough.
Employers must keep a record of the following:
These records must be kept for six years.
HMRC is planning a robust audit of any employers misusing the furlough scheme. It is therefore critical that employers calculate their claims correctly. According to the draft amendments to the Finance Bill, it is proposed that HMRC will charge tax where an employer has claimed under the CJRS but is found to not be entitled to the support. For example, where an employer’s claim is found to be fraudulent or based on incorrect information. Through these provisions, HMRC will have the power to recover payments by imposing a 100% tax charge. There is also scope for a penalty to be imposed where there has been deliberate non-compliance. As before, employees must not do any work at all for the employer for those hours they are declared to be furloughed.
The CJRS will close completely on 31 October 2020. Employers must decide whether employees under the flexible furlough scheme will return to their normal hours. The usual rules of redundancy will apply to furloughed employees.
Official statistics show that 15,336 claims which included a complaint of age discrimination were received at the Employment Tribunals between March 2020 and March 2021.
The outcome of the Employment Tribunal claim brought by Gulnaz Raja against Starling Bank Limited (1) (Starling), and Matthew Newman (2) was reported last month.
In the Autumn Statement delivered on 17 November, rises to the National Living Wage and National Minimum Wage rates were announced, to take effect from 1 April 2023.
The World Cup kicks off in Qatar on Sunday 20 November 2022, with the final taking place on Sunday 18 December 2022. Undoubtedly, this is a huge sporting event, and many employees will be keen to show their support for their favourite teams. However, due to the time difference, start times for the matches are between 10 a.m. and 7 p.m. UK time, which could have an impact on employers if employees who wish to watch the matches are scheduled to work.
Settlement agreements are commonplace in an employment context and are ordinarily used to provide the parties to the agreement with certainty following the conclusion of an employment relationship.
Where an employee appeals against their dismissal under a contractual appeal procedure and their appeal is successful, reinstatement to their previous role is automatic and does not require approval or agreement from the employee.
Settlement agreements in an employment context are ordinarily used to provide both parties with certainty following the conclusion of an employment relationship – but what happens when there is alleged discrimination after entering into a settlement agreement?
A few weeks ago we brought you news that following the Government’s mini-budget it was confirmed that the off-payroll working rules (known as “IR35”) put in place for public and private sector businesses from 2017 and 2021 would be scrapped from April 2023.
In Mogane v Bradford Teaching Hospitals NHS Foundation Trust the Employment Appeal Tribunal (EAT) considered whether it was fair to dismiss a nurse as redundant on the basis that that her fixed-term contract was due to expire before that of her colleague.
The majority of people do not feel the need to embellish their CV to get that coveted position and move on up the career ladder. Their worthiness and benefit to the hiring organisation are easily demonstrated through the recruitment process – application, psychometric testing, selection day or interview.
In July 2022, the Supreme Court handed down its long-awaited Judgement in the case of Harpur Trust v Brazel relating to the correct calculation of statutory holiday pay for part year workers. This decision has implications for all part year workers on contracts which subsist all year round, whether their hours are normal or irregular.
The Government has announced a change to the categorisation of “small” businesses to reduce the amount of regulatory compliance (or “red tape”) required. Currently, SMEs (those with fewer than 250 employees) are exempt from certain regulations – such as the obligation to comply with gender pay reporting. With effect from 3 October, these exemptions will be widened to apply to businesses with fewer than 500 employees.
In University of Dundee v Chakraborty, the Employment Appeal Tribunal (EAT) considered whether a first draft of a grievance report could retrospectively be deemed to be privileged.
The Chancellor’s recent mini-budget provided a significant announcement for business as it was confirmed that the off-payroll working rules (known as “IR35”) put in place for public and private sector businesses from 2017 and 2021 will be scrapped from April 2023.
The Government has published the Retained EU Revocation and Reform Bill which, if passed, provides for the revocation of all “EU-derived subordinate legislation” (i.e. UK statutory instruments which were introduced to implement EU law) and retained direct EU legislation on 31 December 2023, unless legislation is specifically introduced to save them.
On 20 July 2022, the Supreme Court issued its long-awaited judgment in the case of Harpur Trust v Brazel, upholding the decision of the Court of Appeal. For those of you familiar with this case, you will know that it concerns the statutory leave requirements for part-time and part-year workers. For schools and academies whose workforce consists of a variety of types of part-time and part-year workers, this case is one that must be understood before any changes are applied. Come and join Emma Hughes, Head of HR Services as she puts questions to Ian Deakin, Employment Partner, and Sarah Linden, Senior Associate.
The Employment Appeal Tribunal’s recent decision in the case of Mr Michael Cowie & Others v Scottish Fire and Rescue Service provides a useful insight into favourable - or unfavourable - treatment in the context of discrimination claims.
This month, HM Treasury issued a consultation on Administrative Control Process for Public Sector Exits with draft guidance. They’re proposing to introduce an expanded approvals process for employee exits and special severance payments, and additional reporting requirements. If approved, the proposals will impact public sector bodies and those that do not have a specific right to make exit payments.
In Wierowska v HC-One Oval Limited, the Employment Tribunal had to determine whether the Claimant’s beliefs in relation to Covid-19 vaccines amounted to religious beliefs for the purposes of the Equality Act 2010.
Janice Walsh applied for a job with Domino’s Pizza, hoping to secure a role as a Delivery Driver. However things quickly took a turn for the worse during her initial interview, with the very first question that she was asked relating to her age. Ms Walsh was ultimately informed that she had not been successful in her application.
As of 21 July, two separate pieces of legislation came into force which seeks to mitigate against strike action. It should come as no surprise that this is a direct response to the rail strikes, which have dominated the news in the last couple of months.