On the June 12, the government issued a further update regarding how the Coronavirus Job Retention Scheme (CJS) will operate from July 1 onwards. Lucy Beachell from Harrison Drury’s employment law team looks at the latest developments.
As the UK’s economy continues its journey towards recovery from the COVID 19 pandemic, the government has outlined plans to gradually wind down the furlough scheme and end it completely at the end of October.
And after supporting over one million employers and over eight million employees, it’s not going to be an easy transition for some of UK employers. On Friday June 12, the government revealed more detail on how the scheme will work from July onwards.
A couple of headline points to note:
1. The flexible furlough scheme comes into play on the 1st July 2020.
In comparison to the current position, this means that employees will no longer need to completely refrain from carrying out paid work for their employer. Essentially, employees can return to the workplace or work from home on a part-time basis – with such working patterns to be discussed and agreed by both employer and employee.
It’s imperative that employers are consulting openly and clearly with their workforces and that agreements and changes to terms and conditions of employment are accurately documented. Employers also need to give careful consideration to how they will determine which employees can return on a part-time basis keeping in mind at all times both their statutory and contractual obligations.
2. The minimum three-week period for furlough will be removed (as of 1 July 2020)
This will be regarded by many as the most significant change. While there is no minimum period, any claim through the CJRS portal must be in respect of a minimum one-week period (i.e. employers can only put in four claims per month, not 31).
For further details on the changes to the existing CJRS guidance, the government website has the latest policy paper regarding the communication on the June 12.
Due to how it’s been set out, it’s impossible for us to try and summarise this new guidance for all employers in this blog, but here’s a condensed list of the new points with some useful links to resources on the government website.
Check if you can use the scheme:
- Check if you can claim for your employee’s wages through the CJRS
- Check which employees you can put on furlough to use the CJRS
Work out what you can claim:
- Steps to take before calculating your claim using the CJRS
- Calculate how much you can claim using the CJRS
- Find examples to help you calculate your employees’ wages
Claim and report earnings:
- Claim for wages through the CJRS
- Reporting employees’ wages to HMRC when you’ve claimed through the CJRS
It’s crucial that businesses are at all times maintaining an accurate and up-to-date record of all information used to formulate claims via the CJRS, in addition to written records regarding all employment and HR activity. An absence of any such documentation isn’t going to assist a business whose conduct and decision making may later be challenged.
What should employers be doing now?
It’s imperative that employers are keeping abreast of all changes and developments regarding the CJRS. July through to the end of October is going to require a proactive approach from employers and a commitment to getting things right to avoid penalties and challenges from employees and external third parties.
Given the uniqueness of the CJRS and the absence of any case law precedents to date, understanding and following the guidance published by the government is going to provide businesses with the best form of protection.
But, before a business can enter into any form of discussion with its workforce, it needs to have a clear and accurate understanding of the options available and any risks associated with such options, as getting it wrong can result in costly tribunal proceedings and reputational damage.