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Remember, remember 13th November!

“Remember, remember 13th November – ok I know that’s not quite how the rhyme goes but tomorrow is an important date for any employers who have not yet put employees on furlough under the Coronavirus Job Retention Scheme.

As you may be aware, the government has confirmed that the job retention scheme would be extended to 31 March 2020.

Under the extended scheme,  employers can agree to retrospectively furlough an employee with effect from 1 November 2020 as long as the agreement to retrospectively claim is put into place by close of business tomorrow, 13 November. That means that if an employee has not been previously furloughed, that can happen with effect from 1 November 2020.

Another key date for employers to be aware of under the extended scheme is 30 November 2020. The new guidance contains the following on notice and redundancy:-

“Where you must make redundancies, you should do so in accordance with the normal rules. This includes giving a notice period and consulting staff before a final decision is reached. You can continue to claim for a furloughed employee who is serving a statutory notice period, however grants cannot be used to substitute redundancy payments.

The government is reviewing whether employers should be eligible to claim for employees serving contractual or statutory notice periods and will change the approach for claim periods starting on or after 1 December 2020, with further guidance published in late November.

If you make an employee redundant, you should base statutory redundancy and statutory notice pay on their normal wage rather than the reduced furlough wage.”

Prior to the scheme being extended, employers could claim furlough for employees working their notice. The general feeling is that the sentence highlighted in bold above is that employers will not be able to claim contractual notice or statutory notice on or after 1 December where notice of redundancy are issued.

Employers therefore need to think about what financial impact that will have on their business in terms of what they are liable to pay under a redundancy notice.

Other points employers need to be aware of under the new scheme:

  1. From 1 November 2020, employers can claim 80% of an employee’s usual salary for hours not worked, up to a maximum of £2,500 per month.
  2. Employers can claim for employees who were employed on 30 October 2020 as long as they have made a PAYERTI submission to HMRC between 20 March 2020 and 30 October 2020.
  3. There is no maximum number of employees that employers can claim for.
  4. Employers must confirm in writing to the employee that they have been furloughed and keep a written record of that for five years.
  5. From December 2020, HMRC will publish employer names for companies and Limited Liability Partnerships who have claimed under the scheme.

If you need a furlough agreement in place by tomorrow, or you want to know more about how to apply the extended scheme, then please contact me, Julie Sullivan, on 01383 745784 or jks@businesslaw.co.uk and I can chat you through what’s involved.

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