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Getting to grips with the Government’s Furlough Scheme

07 April 2020

The Government’s Coronavirus Staff Retention Scheme (“the Scheme”) is an unprecedented system introduced at break-neck speed. Despite the updated guidance on the Scheme this weekend (4 April 2020), there are still some issues to be ironed out.

The updated guidance as at 4 April 2020 can be accessed here.

See our team’s blog on the updated guidance here.

Whilst the Scheme is to be applauded by businesses, employers and staff alike, there are still some unanswered questions, the main one being around annual leave and furlough leave.

Another grey area is around those shielding. The guidance now states that those shielding (for 12 weeks) and those who need to stay home with someone who is shielding can be furloughed. However, a new provision is added that seems to suggest these groups may only be in scope for furlough if they would otherwise be made redundant. If they would not otherwise be made redundant, then arguably they cannot be furloughed, with the risk that the employer may be unable to reclaim via HMRC. This is an important change as the previous version of the guidance on 26 March 2020 simply stated employees who are shielding in line with public health guidance can be placed on furlough.

It is also now clear from amendments to the SSP Regulations that only those who are self-isolating for 7/14 days will be deemed sick for SSP purposes. So those who are shielding or otherwise those in vulnerable groups who are advised to maintain social distancing are not entitled to SSP (and likely not due contractual sick pay either).

So, those who are vulnerable and shielding themselves from the risk of possible infection are due neither SSP nor, based on the most recent guidance, furlough pay. Yet the guidance also states that those who are caring for others due to coronavirus can be furloughed. Does that mean they can be furloughed even if they would not otherwise be at risk of redundancy/lay off (unlike those who are shielding)? At best it is unclear, at worst it is illogical and inconsistent. We expect further clarification will follow.

We can advise on these issues and how to manage the risks but more government clarification is required on these issues to allow employers to manage their staff. With the Scheme only being in place until 31 May 2020, time is of the essence as employers are requiring to make decisions about such matters now.

Some of the key issues we do know:

Some issues around handling staff during the coronavirus pandemic are now clearer in light of updated guidance:

  • Who is covered by the Scheme? It covers the following individuals provided that they were on a UK employer's PAYE payroll on or before 28 February 2020:
    - employees on full time and part time contracts
    - those on agency contracts
    - those on flexible or zero-hour contracts and
    - apprentices (see more on apprentices below)
    - office holders (such as company directors)
    - salaried members of LLPs
    - “workers” as defined in the Employment Rights Act (but not those in business on their own account)
  • Staff can be furloughed multiple times, i.e. they can be furloughed, brought back to work, then re-furloughed (subject to each furlough period being at least three weeks to allow the reclaim via HMRC)
  • Employers must notify staff of their furlough status in writing (the previous guidance did not require it be in writing although this was our advice as this is best practice) and keep the record of that written notification for five years.
  • Claims should be started from the date that the employee finishes work and starts furlough, not when the decision is made, or when they were written to confirming their furloughed status.
  • In addition to the employer having started a PAYE payroll scheme on or before 28 February 2020 and having a UK bank account, an addition is that the employer must also be enrolled for PAYE online. This can take up to 10 days.
  • A reminder that staff who are self-isolating are entitled to statutory sick pay (SSP) for 7 or 14 days (and from day 1 of the period).

Updated guidance issued about Apprentices 6 April 2020:

The government has this week published updated guidance for apprentices as well as for employers, training providers, end-point assessment organisations and external quality assurance providers.

The guidance introduces new measures, for the duration of the pandemic, to make it easier for apprenticeships to continue and complete in a different way if they need to, or to break and resume an apprenticeship later when that becomes possible.

Some key points:

  • Apprentices can be furloughed in the same way as other employees and they can continue to train whilst furloughed as long as it does not provide services or generate revenue for their employer.
  • Training and assessment can take place remotely
  • Extensions can be granted, where appropriate, to the timetable for assessments
  • Breaks are permitted in learning, and explaining how they should be recorded
  • HM Treasury will not be pausing apprenticeship levy payments for employers

Coronavirus (COVID-19): guidance for apprentices, employers, training providers, end-point assessment organisations and external quality assurance providers: click here

This topic and government guidance changes day to day. This blog does not constitute legal advice and if you require specific advice on the topic, one of our employment law experts would be delighted to assist.

Employment law

Caroline Carr, Partner: E: cac@bto.co.uk / T: 0141 225 5263
Laura Salmond, Partner: E: lis@bto.co.uk / T: 0141 225 5313
Jacqueline McCluskey, Partner: E: jmcc@bto.co.uk / T: 0131 222 2936
Douglas Strang, Senior Associate: E: dst@bto.co.uk / T: 0141 225 5271

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