Location: Northern Ireland
Rep.of Ireland
Location: Northern Ireland
Rep.of Ireland
Home / Articles / Furlough Payments and Notice – An Update

Furlough Payments and Notice – An Update

Posted in : Supplementary Articles NI on 8 July 2020 Issues covered: Coronavirus; Redundancy; Leave

Jones Cassidy Brett

6 July 2020

On 25 June 2020, the Government issued a revised version of the Treasury Direction on the Coronavirus Job Retention Scheme (CJRS). It is complex and mainly relates to the various calculations you need to undertake to flexibly furlough employees. The Government has also updated its Guidance. We have set out below some of the important points to note.

Notice during Furlough

1. One of the most concerning issues arising out of the latest revision of the Direction was the suggestion that notice of termination of employment cannot be given during furlough. You may have seen a lot of panic about this point in the headlines over the weekend. However, the HMRC customer helpline has since clarified the point that employers can continue to use the CJRS during both redundancy consultation and for employees working out their notice periods. This HMRC clarification is not a legally binding view and there is currently no written confirmation from the HMRC on the point.

 2. The Treasury Direction added a new paragraph which states:-

“2.2 Integral to the purpose of the CJRS (the Coronavirus Job Retention Scheme) is that the amounts paid to an employer pursuant to a CJRS claim are used by the employer to continue the employment of employees in respect of whom the CJRS claim is made whose employment activities have been adversely affected by the coronavirus and coronavirus disease or the measures taken to prevent or limit if further transmission.”

3. There was a concern that the Government was trying to limit CJRS claims to employees whose employment would be continuing and not those whom the employer intended to make redundant or may be working out their notice. However, this interpretation of the new wording in the Treasury Direction would be against our previous thinking and indeed against previous Government policy statements that furlough pay can be used during any notice period. Thankfully the HMRC helpline has verbally clarified that you can continue to use the CJRS during both redundancy consultation and notice periods.

4. It is now clear from the Treasury Direction that claims cannot be made under the CJRS to pay in lieu of notice or to pay statutory redundancy payments. This was always the case but now this point is clear.

Other Points to note

5. Paragraph 35 of the Treasury Direction also makes it clear that a claim cannot be made in respect of a period of unpaid sabbatical or other period of unpaid leave that falls between 1 July and 31 October 2020.

6. The Government Guidance was also updated on 1 July 2020 to say:-

“If an employee is flexibly furloughed then any hours taken as holiday during the claim period should be counted as furloughed hours rather than working hours. Employees should not be placed on furlough for a period simply because they are on holiday for that period”. So it is clear that you cannot just furlough employees and claim the grant under the CJRS when they go on holiday. That would potentially be an abuse of the scheme.

      

This article is correct at 08/07/2020
Disclaimer:

The information in this article is provided as part of Legal-Island's Employment Law Hub. We regret we are not able to respond to requests for specific legal or HR queries and recommend that professional advice is obtained before relying on information supplied anywhere within this article.