Coronavirus Job Retention Scheme Guidance – Updated

The Government has published another update to its furlough scheme on the 4th April.

Many businesses are having to make unenviable decisions on how to keep their businesses going while still retaining their workforce at this difficult time. There were a number of points in the furlough scheme which were unclear which the Government has sought to clarify in its latest guidance.

The central points are as follows :-

  • Employees can begin a new job when on furlough so effectively they could get 100 per cent of their salary.  Also if an employee has two jobs they can be furloughed for one job and still continue working for another employer.  Employees must remember that if they do start a new job while furloughed they need to check if their contract of employment permits it and if not, then ask their employer to vary the contract preferably in writing.  Most employers are likely to agree to any changes because they will want to retain their workforce in these difficult times;

 

  • Company directors can be furloughed if they are employees of the company.  Company directors can carry out two functions, firstly as a statutory director where they have to comply with their duties under the Companies Act and secondly any duty as an employee to generate commercial revenue for the firm which involves the day to day management of the organisation. If they decide to be furloughed as an employee then they won’t be able to do anything which generates a revenue but will be able to do tasks which comply with their duties as a statutory director such as filing company accounts.  A non-executive director would not be permitted to be furloughed as they are not an employee of the company.  The Government needs to consider providing more guidance for directors as to their position as it is not always clear as to how a person is operating in these two roles;

 

  • There have been questions about whether the 80 per cent payment from HMRC will include non-monetary benefits such as private health car or a car.  The current guidance is that it does not include these types of benefits;

 

  • It wasn’t clear in the previous guidance whether employees needed to be notified in writing about being furloughed but this has been rectified and the current guidance is that employees do have to be notified in writing.  Also the information about the furloughed employees being notified has to be retained by companies for five years and it will be important for companies to keep a paper trail of how they have furloughed employees as HMRC is likely to go through this in detail later on in terms of recouping any monies where businesses have not been complying with the guidance;

 

  • There is a provision in the current guidance that employees can be furloughed multiple times which is good news for businesses because if their work picks up then they can bring employees back into the business and rotate employees so they don’t feel isolated.  However an employee has to be furloughed for a minimum of three weeks and would have to be brought back into the business after this initial period.  This can be a very unsettling period for a lot of employees, not knowing if they will have a job at the end of the period and wondering if they will have to face redundancy;

 

  • An employer can claim 80 per cent of compulsory commission payments, presumably meaning contractual commission as well as basic salary.  This means that where employees have outstanding commission owing they will still be able to claim but will not be able to obtain commission payments for sales during the period they are being furloughed;

 

  • Employees can still accrue holiday while they are being furloughed.  This may lead to further problems for employers later on that they have a lot of employees wanting to take their outstanding leave when they return to work.

 

If any business needs assistance in navigating their way through this guidance please do get in touch as we are here to help.

To speak with Jane directly about this or any other employment-related matter, please email JZC@hartbrown.co.uk or call 01483 887766.

This is not legal advice; it is intended to provide information of general interest about current legal issues.

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Jane Crosby

Partner, Dispute Resolution & Accredited Mediator

Jane is an employment and commercial litigation solicitor of more than 15 years' experience. Prior to entering the legal profession, Jane was employed in the...

Partner, Dispute Resolution & Accredited Mediator

Jane Crosby

Jane is an employment and commercial litigation solicitor of more than 15 years' experience.

Prior to entering the legal profession, Jane was employed in the aviation industry. This experience is appreciated by many of Jane's clients who note that she is able to take a commercial and pragmatic approach to any legal issue that they face.

Jane acts for a wide range of individuals and businesses and her areas of specialism include aviation, property related industries and IT. Jane regularly advises on aspects of employment law, such as settlement agreements, employment contracts, policies and procedures, redundancies, equal pay, data protection, issues arising from TUPE and reorganisations, the calculation of holiday pay, bonus and commission payments, disciplinary and grievance issues, dismissal and termination issues, the protection of confidential information and the enforcement of restrictive covenants. Jane gets involved in GDPR training for her clients and she is able to deliver tailored employment law training sessions upon request.

As a commercial litigation lawyer, Jane also deals in shareholder and directors disputes, commercial contract disputes and the enforcement of restrictive covenants.

Jane has been involved in successful high value commercial litigation for clients in the High Courts, she is an accredited mediator and she is a member of the Employment Lawyers Association.

Jane is often asked to write for a number of well known publications, including The Daily Mail, The Telegraph and The Week and she has been interviewed on BBC Radio 4.

Here is small selection of the feedback that Jane has received:

“Jane, I cannot sincerely thank you enough for your wise counsel and am delighted to have made your acquaintance. If I am blessed with a new position somewhere I will hand over my contract in the first instance to you. Likewise, any of my friends, peers, romans and countrymen wanting advice, I will point them in your direction.”

“Jane, you have been most resilient on my behalf for which I sincerely thank you for all your endeavours. I have a tremendous working relationship with Hart Brown and you have undoubtedly compounded this further."

“I appreciated the clarity of advice given at a stressful time”.

“A sensitive and highly professional approach and efficient work in the interests of the client”.

“Your advice, conduct and assistance have been indeed outstanding and very professional but also – and most importantly – very humane”.

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