Further guidance on the Coronavirus Job Retention Scheme

Very early on Saturday morning (4 April 2020), further Government advice on the Coronavirus Job Retention Scheme (”the Scheme”) was published on the Government website – a link to the latest guidance can be found here.

The updated guidance offers some clarification on key aspects of the Scheme, but remains silent on other questions being asked by employers.

A note on the key updates is set out below:

  • Employees are able to commence new employment with new employers and remain on furlough from their existing employers, although this is subject to their employment contracts not prohibiting this (which could be waived by an employer). This perhaps offers a windfall to furloughed employees, enabling them to receive 80% pay from their existing employer and 10% pay from their new employer.
  • Furlough pay should now include 80% of commission payments, as well as basic salary, albeit subject to the overall cap of £2,500 per month. Non-monetary benefits, such as private healthcare or cars are not to be included.
  • Company directors can be furloughed and can still perform their statutory duties, but no other work. For further details on statutory duties of directors, please click here to see our blog on Directors’ Duties and Responsibilities.
  • Employees can be furloughed multiple times, which means they can be furloughed, brought back and then furloughed again, provided always that each period of furlough leave lasts for a minimum of 3 weeks.
  • Employees must provide written notification to employees when furloughing them and must keep a record of the notification for at least 5 years. This is presumably an anti-fraud measure, enabling HMRC to request records proving employees were in fact furloughed. HMRC has already made it clear that it reserves the right to audit all applications made under the Scheme.

The updated guidance is still unclear on the issue of holidays during furlough leave, specifically whether employees can take, or be made to take, holidays whilst they are on furlough leave without disrupting their furlough leave and, if they can, how the employees should be paid for such holidays.

We hope further guidance will be forthcoming in subsequent days and weeks to address some of the outstanding issues for employers. As soon as we learn more, we will make sure you are kept up to date.

The Employment Team at MLP Law can help you with any issues raised in the update. Just contact us on 0161 926 9969, employment@mlplaw.co.uk or on our employment law-specific Twitter account @HRHeroUK.