Further updates containing more detail regarding this scheme continue to be published on a regular basis. Please note some of the following headline points that are addressed, with more detail on the following points than previously communicated, within these updates.
Holiday pay
Whilst furloughed, the government guidance states that the employee will continue to accrue leave as per their employment contract. They can agree with the employer to vary holiday pay entitlement as part of the furlough agreement, however almost all workers are entitled to 5.6 weeks of statutory paid annual leave each year which they cannot go below.
Therefore, employees can take holiday whilst on furlough. Working Time Regulations (WTR) require holiday pay to be paid at their normal rate of pay or, where employees rate of pay varies, this will be calculated on the basis of the average pay that they would have received in the previous 52 working weeks. Therefore, if they take holiday while on furlough, their employer should pay the usual holiday pay in accordance with the WTR. Employers will be obliged to pay the additional amounts over the grant, though will have the flexibility to restrict when leave can be taken if there is a business need. This applies for both the furlough period and the recovery period.
If employees usually work bank holidays, then the employer can agree that this is included in the grant payment. If the employee usually takes the bank holiday as leave, then the employer would either top up pay to the usual holiday pay or give a day of holiday in lieu.
During this unprecedented time, the guidance clearly states that they are keeping the policy on holiday pay during furlough under review.
Applying for furlough
Employers cannot backdate the furlough period for all employees. The scheme is only backdated to 1 March to cover employees who have already been furloughed or made redundant as a result of the coronavirus restrictions.
When employees have been furloughed on or after 28 February, government advice has now expressly confirmed that claims can be backdated to the date on which they were furloughed.
Employers are only eligible to claim the reimbursement once they have agreed the furlough with employees and the employees have stopped working. The claim cannot be backdated to a date when the employees were still working.
The general principle is that furloughed employees must have been on the PAYE payroll and notified to HMRC (on the real time information system) on or before 19 March 2020.
HMRC will check claims made through the scheme. Payments may be withheld or need to be repaid in full to HMRC if the claim is based on dishonest or inaccurate information or found to be fraudulent.
Dishonest or deliberately fraudulent claims put the essential public services and the protection of livelihoods at risk during these challenging times.
HMRC has put in place an online portal for employees and the public to report suspected fraud in the Coronavirus Job Retention Scheme.
If an employee is on a fixed term contract
There is no minimum period which must be left to run on a fixed term contract to enable it to be renewed or extended, but it must not have ended. The furlough period must be for a minimum period of three consecutive weeks.
Agreeing to furlough employees
To be eligible for the grant employers must confirm in writing to their employee confirming that they have been furloughed. If this is done in a way that is consistent with employment law, that consent is valid for the purposes of claiming the CJRS. There needs to be a written record, but the employee does not have to provide a written response. A record of this communication must be kept for five years.
If you would like further guidance or support on this matter or require advice on other people management matters please contact Clover HR on 0121 516 0299 or email us at info@cloverhr.co.uk
Copyright Clover HR
