In response to the lockdown measures to be imposed later this week, the Coronavirus Job Retention Scheme (CJRS) will be extended once again and remain in place until 2 December 2020 to offer further financial support for employers.
The Government’s recently announced Job Support Scheme (JSS) has been put on hold whilst the CJRS is extended.
Is the JSS still an option?
The JSS was to begin on 1 November 2020 and replace the CJRS as a means of financial support available for businesses. HMRC confirm that all 11 guidance documents relating to both of the JSS schemes (open and closed) are temporarily withdrawn, since the CJRS (furlough) scheme has been extended to 30 November 2020.
It is expected, however, that the JSS will be re-introduced after the end of this most recent extension of the CJRS.
Who benefits from this latest extension of the CJRS and how much can employers expect to receive under the scheme?
The CJRS remains open to all employers with a UK bank account and UK PAYE scheme, small or large, charitable or non-profit. The Government will provide a grant covering 80% of employee wages up to a capped amount of £2,500 for the hours the employee does not work. Employers will be responsible for paying employer National Insurance Contributions (NIC’s) and pension contributions in respect of the grant. The level of the grant and the Employer NIC’s and pension payments mirrors the position under the last CJRS extension in August 2020.
The CJRS will continue to offer flexible furlough options to businesses that need to either furlough employees on a full time basis or on a part time basis, using the furlough scheme for an employee’s unworked hours in the latter situation.
As with the previous extension of the CJRS, employers are still able to top up employee wages above the scheme grant at their own expense if they wish.
Can people who could not be furloughed under the scheme rules before now be furloughed or is this just extending the availability of the scheme to those already furloughed?
It is not a requirement that an employer made use of the CJRS previously to make a claim under this one. The CJRS extension which comes into effect from 2 November 2020 is available in respect of employees on the employer’s PAYE payroll by 23:59 30th October 2020. The Government says it will confirm shortly when claims can first be made in respect of employee wage costs during November 2020.
Can those on this extended furlough be taken through a redundancy process?
This point has not specifically been covered in respect of the extended CJRS, but on the basis that the extended scheme will apply the same rules as the previous scheme, employers are not prevented from starting to plan for redundancies involving furloughed employees and/or giving notice of redundancies to furloughed employees.
Employers can continue to claim for a furloughed employee who is serving a statutory notice period, however, the CJRS grants cannot be used to substitute redundancy payments which employers will need to make themselves.
Clients should also note that redundancy payments must be based on the employee’s usual wage and not any reduced wage received during a period of furlough. Employers may, therefore, want to consider suspending any redundancy processes until the end of the current extension of the scheme.
Redundancy dismissals will, of course, still need to comply with the rules on unfair dismissal and equality legislation.
Can those on the extended scheme be given notice of termination?
Again, subject to any government guidance that departs from the rules of the previous scheme, employers may serve an employee on furlough with notice of termination of employment and allow that notice period to run alongside a period of furlough. Once a period of employment ends, however, no further financial support from the CJRS will be available to the employer in respect of that employee.
Payments in lieu of notice (PILONS) are not recoverable through the CJRS. Employers may therefore prefer to keep furloughed employees “on their books” during a notice period since pay during a “furloughed” notice period is recoverable under the CJRS (subject to the limit of 80% of an employee’s wages, capped up to £2,500).
Should you require any assistance with your employment arrangements during the Covid-19 pandemic, please do not hesitate to contact the co-head partners of our employment department. Ewan Keen can be reached at 020 3206 2724 or firstname.lastname@example.org or Tamara Ludlow can be reached at 020 3206 2739 or email@example.com.