Flexible Furlough – what you need to know about the updated Coronavirus Job Retention Scheme
Over the weekend the Government published its guidance to the Flexible Furlough changes to the Coronavirus Job Retention Scheme (“CJRS”) as part of its plan to get the nation back to work. With the CJRS grant reducing from August, and being removed altogether by the end of October, the Flexible Furlough changes provide a welcome alternative to employers who are evaluating their options in light of the economic impact of Covid-19.
What has changed?
The CJRS closed to new employees on 10 June 2020. Consequently if an employee has not been placed on furlough by that date then an employer will be unable to make a furlough grant claim in respect of that employee going forward.
Previously, in order to be eligible under the CJRS an employee was not permitted to undertake any work for the employer. The minimum period an employee could be furloughed for was 3 weeks. This has now been changed with the introduction of Flexible Furlough.
From 1 July 2020, an employee will be able to undertake work for their employer and the three-week minimum period has been removed.
Employers will now be able to have employees work part of the week and be furloughed for the rest. The employer will have pay the employee’s wages for the time worked and will still be able to claim the Furlough Grant in respect of the hours not worked. Employees can work for any number of hours and in any pattern.
Who can claim?
An Employer can flexibly furlough an employee if:
i. the employee has been furloughed for a 3 consecutive weeks between 1 March 2020 and 30 June 2020;
ii. they have operated a UK PAYE scheme on or before 19 March 2020;
iii. they submitted a report under a Real Time Information reporting system for that employee prior on or before 19 March 2020;
iv. they enrolled for PAYE online;
v. they have a UK bank account.
Following 1 July 2020 the number of employees that an employer can claim for is limited to the maximum number of employees an employer submitted a claim for prior to 1 July 2020. Therefore if an employer submitted three claims for 12 employees in April, 20 employees in May and 15 employees in June, they would be able to submit a claim in respect of a maximum of 20 employees from 1 July 2020.
Recording the agreement
As with the original Furlough Scheme, any arrangements implemented to flexibly Furlough an employee must be employment law compliant. The decision must not be discriminatory and you must keep a record of:
i. The agreement confirming the new arrangement (for five years);
ii. The number of hours worked by the employee;
iii. The number of hours the employee is on furlough.
The employee does not have to provide a written response to the agreement.
Practical points to consider
Whilst there is no obligation on employers to recall employees from furlough, there are a number of actions employers ought to take in light of the changes:
i. Employers should take advantage of the time available between now and 1 July 2020 to consider their future staffing requirements and whether they wish to utilise the flexible furlough option;
ii. If an Employer does intend to utilise the flexible furlough scheme they must consider the employment law requirements – specifically the need to secure a lawful (eg non discriminatory) and legally binding contract variation;
iii. As part of this Employers will wish to consider the extent of consultation needed with employees as to the hours and work pattern they wish to implement. It is worth remembering that some employees may have been out of the workplace for almost 4 months and there will be a wide range of views about a return to work. Providing employees with a say in how they return will help to make this a positive experience;
iv. Some Employers have been taking advantage of the possibility of interchanging the employees they have furloughed. This involves furloughing employee A for the first 21 days and then Employee B for the next 21 days, and so on. The flexible furlough now provides Employers with the opportunity to have both employee A and employee B back part-time if they wish.