Furlough Guidance Updated

The guidance for employers on the Coronavirus Job Retention Scheme was updated on 4 April 2020. The scheme allows employers to furlough staff and claim back part of their wages. The new guidance adds detail and some clarifications to the original HMRC guidance published on 26 March, but many questions remain.

Some of the key changes and clarifications are:

• Employees who have been dismissed for any reason since 28 February 2020 can be rehired and placed on furlough – rather than just those employees who had been made redundant since that date.
• Employees who are shielding in line with public health guidance can be furloughed if they are unable to work from home and you would otherwise have to make them redundant. This seems to be based on a misunderstanding, or unorthodox interpretation of, redundancy, as this scenario would not, in normal times, amount to a redundancy.
• Employees who are unable to work because they have caring responsibilities resulting from coronavirus can be furloughed. For example, employees that need to look after children can be furloughed. Again, this seems to contradict the intention expressed elsewhere in the guidance that the scheme applies as an alternative to redundancy.
• Employees with two jobs can still work for one employer while on furlough from the other and an employee who is placed on furlough is able to start a new job.
• More information is provided about apprentices and furloughed employees who undertake training (separate guidance was also published in relation to apprentices on 7 April).
• Detail has been added about furloughing company directors and partners of LLPs.
• There’s more information about agency workers and readers are signposted to the separate scheme for Contingent Workers in the Public Sector, which guarantees the continued payment of certain agencies and supplies to the public sector.

Among the significant questions about the scheme that remain unanswered are:

• How it applies to organisations who receive funding from both public and private sources

The guidance still refers to the government’s “expectation” that the scheme will not be used by many public sector organisations and that “organisations who are receiving public funding specifically to provide services necessary to respond to COVID-19 are not expected to furlough staff”, although there is no express disqualification on publicly-funded bodies from benefiting.

• How it interacts with sick leave and annual leave

We know that employees on SSP cannot be furloughed until they return to work, but we don’t know how to deal with someone who becomes ill during furlough leave: in one place the guidance says that furloughed employees have the right to SSP but in another it states that employers cannot claim under the scheme for an employee who is receiving SSP.

With the spring bank holidays approaching, many employers want to know whether furloughed staff can take or be required to take annual leave during furlough and, if so, what remuneration they would be entitled to. The guidance appears to suggest that it is not possible to be furloughed and take holiday at the same time. But if holiday leave is incompatible with furlough, it would mean that a day’s leave (including, in many cases, a bank holiday) would interrupt the three week blocks in which furlough must be taken.

Please contact our team below if you have any questions regarding this or any other issue and keep abreast of all the latest Coronavirus law changes at our COVID-19 portal.