10 June 2020 – A Pivotal Date

Since the Chancellor of the Exchequer’s announcement of the start of the Coronavirus Job Retention Scheme (CJRS) ‘phase 2’ on 01 July 2020, employers and individuals need to be aware of the implications of 10 June 2020.

The bare details of the announcement were as follows:

• The CJRS will remain unchanged until 30 June 2020
• Flexibility (‘flexible furloughing’) will be introduced from 01 July 2020 – CJRS 'phase 2'
• August 2020 will see the level of UK Government support reduce, and
• The CJRS will end on 31 October 2020

It is important to separate two things:

1. The amount payable to an employee.  This would be mutually-agreed between employee and furloughed employee with a contractual change
2. The amount an employer can reclaim from HMRC in the form of a grant (for wages, National Insurance and pension until 31 July 2020)

Further, the way that an employer calculates pro-rata payments for an employee is possibly different from the way that HMRC does proration when making a grant reclaim.

It is also important to state that an employee can be furloughed for any length of time.  This is a matter of mutual agreement between employee and employer.  However, only employees that have been furloughed for a minimum of 21 days are eligible employees for the CJRS.

Essentially, what this means is that employers will be able to bring employees back from furlough on hours and shifts that suit the employer and employee (remembering that furloughing is a mutual decision).  As a result, the requirement for the minimum 21-day furlough period will disappear.  The announcement refers to this as this ‘introduction of part time furloughing’.

There is one date that is pivotal for employers and individuals to enable part-time furloughing:

The current format of the CJRS (‘phase 1’) will close to ‘new entrants’ on 30 June 2020.  

What this means is that it will no longer possible to furlough an employee for the first time and make a reclaim under the CJRS.  Given that the minimum furloughing and claim period is 21 days, this means that any employees that have not been furloughed before must be furloughed on or before 10 June 2020.

It will be perfectly possible to furlough an employee and make a claim under the revised CJRS, so long as they have been furloughed for a period of 21 days prior to 30 June 2020.  This exposes two types of furloughed employee which, to be fair, may exist at the moment under CJRS ‘phase 1’:

1. A furloughed employee where the employer can make a claim under the CJRS
2. A furloughed employee where the employer cannot make a claim under the CJRS

Perhaps the HM Treasury Factsheet exposes the potential issue of ‘phase 2’ for employers and individuals (this was also repeated in a House of Commons statement on 03 June 2020).  Under point 3 it says:

So what about employees that have not had a 21-day period of furlough by 30 June 2020?  Simply, if the employer has not used furloughing and wants to make a CJRS grant claim, they need to be thinking about this in the next few days. 

Perhaps, specifically:

Remember, if an employee has not been furloughed for 21 days before 30 June 2020, the employer will not be able to make a grant reclaim – under ‘phase 1’ or the new ‘phase 2’ being introduced from 01 July 2020.

Take a simple example.  A woman is due to return from maternity leave on 29 June 2020.  She has not been furloughed before, indeed, the employer may not have been incurring any costs at all if she was receiving Maternity Allowance or in the last 13 weeks of the Statutory Maternity Pay Period:

• If there is a job for her to return to, she can return to employment
• If there is not a job at the moment because of the pandemic and similar employees to her in the company have been furloughed, she can also be furloughed but the company will not be able to make a grant reclaim under the CJRS

Therefore, what are the options available to employers in this situation?  Especially if the employer intends to furlough her on her return with the expectation that they will be able to make a grant reclaim under the CJRS.  The employer absolutely cannot impose that the woman returns from her statutory leave entitlement. 

Maybe, they will want to consider:

• UK Government guidance (‘Check if your employer..’ updated 29 May 2020) suggests that employees receiving enhanced maternity pay can be furloughed and this occupational element can be reclaimed under the CJRS.  It does not say that claiming will bring her maternity leave to a conclusion
• Although, there is nothing specifically to say that an employee just in their Statutory Maternity Pay period cannot be furloughed.  So, it may be that the employee chooses / confirms that they will end their Statutory leave period and be furloughed, even if the employer makes no CJRS claim. Although, this brings to an end her Maternity Leave Period (MLP) which cannot be reopened. Can she be on furlough and in her MLP at the same time?
• As long as she has taken the period of Compulsory Maternity leave, there seems nothing wrong with the woman curtailing her Maternity Leave and converting this to a Shared entitlement.  This means that the mother would be able to end her Maternity Leave, be furloughed (with reclaim by the employer) and then resume leave but now called Shared Parental Leave.  Guidance  from the Department for Business, Energy and Industrial Strategy (BEIS) indicates that employees ‘can give 8 weeks’ notice’ to curtail, though it does not say that this cannot be a matter of days.  See HMRC’s Statutory Payment Manual for guidance on the cumbersome information required on the Notification of Entitlement and Intent
• The employee is normally required to give 8 weeks’ notice of her intention to return to work before the end of the assumed 52-week leave period.  However, the Maternity and Parental Leave Regulations 1999, regulation 11(5) say that this only applies if the employer has confirmed the date of return in writing.  11(5) was inserted into the 1999 Regulations by the Maternity and Parental Leave (Amendment) Regulations 2002 and Northern Ireland equivalent

Employers have to be really careful about the number of furloughed claims that they are making, simply because the intention is that the numbers of furloughed staff will decrease in the coming months.  From 01 July 2020, the Factsheet says that the ‘number of employees an employer can claim for in any claim period cannot exceed the maximum number they have claimed for under any previous claim under the current CJRS’.

So, for example, if there are more employees in your July reclaim than in your June reclaim, the whole thing will be rejected.

This does seem to unfairly disadvantage the employers who are currently using rotational furloughing, where less staff are required in one period than the next.

Be aware of this one!

It’s all a very grey area, so this is a time to get professional employment law advice, or seek the advice of:

• The Advisory, Conciliation and Arbitration Service (in Great Brian) on 0300 123 1100
• The Labour Relations Agency (in Northern Ireland) on 03300 555 300

This is a pending and potentially great issue for many employers and individuals. Remember the Factsheet guidance that says:

Of course, the Chancellor’s announcement and news story on 29 May 2020 said that further guidance will published on 12 June 2020 – this is too late for employers and individuals.  Remember:

I really recommend seeking professional employment law advice.  Also remember that people returning from family-related leave enjoy a great many employment law protections against unfair treatment and redundancy.  This might not be an option either.