It is generally accepted that the Government’s Coronavirus Job Retention Scheme (CJRS), or “Furlough Scheme” has been a significant factor in avoiding many more job losses due to the Pandemic.
It is not surprising therefore that the Chancellor announced in his Budget speech on 3rd March 2021 the extension of the Coronavirus Job Retention Scheme, which was due to cease at the end of April 2021.
The Furlough Scheme has been extended for a further five months until the end of September 2021. During April, May and June there will be no changes to the Scheme as it currently operates. This means the Government continuing to pay 80% of wages for hours not worked, with employers paying National Insurance and pension contributions.
However, from July the Government will introduce an employer contribution towards the cost of unworked hours. This will be 10% in July (Government contribution reducing to 70%) and 20% in August and September (Government contribution reducing to 60%). During the extended period from May until the end of September employers will still have the option of placing employees on flexible furlough.
Since the previous extension to the Furlough Scheme, to make a claim for an employee's wages relating to hours unworked on or before 30th April 2021, pursuant to the Furlough Scheme, the employee in question must have been employed on 30th October 2020, with the employer having made a PAYE Real Time Information (RTI) submission between 20th March 2020 and 30th October 2020.
To make a claim for an employee's wages relating to hours unworked on or after 1st May 2021, the now extended period of the Scheme, the employee must have been employed on 2nd March 2021, with the employer having made made a PAYE Real Time Information (RTI) submission between 20th March 2020 and 2nd March 2021.
It remains the decision of the employer whether to place an employee on Furlough, or flexible Furlough, or not. Employees do not have an entitlement to be furloughed. Since the Scheme was first introduced the criteria for justifying placing an employee on Furlough (and therefore the employer’s entitlement to recoup wages from the Government), has been reviewed and clarified. For example, clinically extremely vulnerable employees can be furloughed, and an employer does not need to be facing a wider reduction in demand, or be closed, to be eligible to make a claim pursuant to the Furlough Scheme. In January 2021 (in response to the latest lockdown) the rules were further revised to confirm those with caring responsibilities could also be furloughed; this would include parents looking after children because schools are closed due to the pandemic.
Although employees do not have a legal right to be furloughed, employers should take care when considering requests; employees denied Furlough in circumstances covered by the guidance may argue they have been discriminated against.
If you are an employer and have any employment law issues relating to furlough, contact David Dixey, Employment Law specialist, on 01206 593933.