(Another!) Update to the Job Retention Scheme

Yesterday afternoon (15 April 2020), the government published updated information about the job retention (furlough) scheme.

• First, in the form of legislation: the Treasury issued a Direction to HMRC about containing instructions for making payments under the scheme; and
• Second, in the form of a fourth iteration of the scheme guidance (that’s four versions in under three weeks).

We’ve summarised below the most important changes likely to be relevant to you.

The Guidance

• Apart from some new practical information about how to upload employee details to apply for the scheme, the guidance has changed very little since version three (published on 9 April). The one big change relates to the cut-off date for employees to have started work with you. Previously you had to have employed them on 28 February 2020 to be eligible; now the cut-off is 19 March 2020. This brings many more employees into scope to benefit.

The Statutory Direction

• confirms that the scheme is not limited to employees who would otherwise be redundant. Rather, it applies to anyone furloughed “by reason of circumstances arising as a result of coronavirus or coronavirus disease”. Previous versions of the guidance had indicated that, in certain circumstances, individuals could only be furloughed if their role was redundant;
• clarifies that there needs to be a written agreement between employer and employee (it says email is okay). In contrast, the guidance we’ve had to rely on until now says that “Employers should discuss with their staff and make any changes to the employment contract by agreement.” Employers who have already furloughed staff with no written agreement in place might therefore not be eligible under the scheme. It’s important to retain your records for at least five years so that you can evidence the agreement you reached;
• says nothing about how furlough interacts with holiday, despite the fact that this topic has been the subject of confusion and speculation ever since the first version of the scheme guidance was published;
• continues to provide for the furloughing of shielded staff and carers;
• provides no further information about the application of the scheme to the public sector or to organisations that are wholly or partly funded by public money. Version four of the guidance retains the same wording on this as its predecessor, which includes the phrase “In a small number of cases, for example where organisations are not primarily funded by the government and whose staff cannot be redeployed to assist with the coronavirus response, the scheme may be appropriate for some staff.” The Directions make no mention of the issue whatsoever.

The scheme is due to go live on Monday 20 April, so it seems unlikely these documents will now be amended.