COVID-19: CJRS Flexible Furloughing

• Published date: 22 June 2020
• Author: Ms Connie Cliff and Jane Fielding
• Subject Matter: Employment and HR, Coronavirus (COVID-19), Retirement, Superannuation & Pensions, Employee Benefits & Compensation, Redundancy/Layoff, Employment and Workforce Wellbeing, Operational Impacts and Strategy
• Law Firm: Gowling WLG

From 1 July 2020, the Coronavirus Job Retention Scheme (CJRS) is changing. Businesses will be given the flexibility to bring furloughed employees back to work part time and still claim under the CJRS.

But, for claims from 1 July onwards, CJRS will only be available to employers that have already used the scheme and subject to some limited exceptions, only in respect of employees they have previously furloughed for the current minimum of three weeks.

On 12 June 2020, HM Revenue and Customs (HMRC) published further updates to the official guidance on CJRS, providing more detail of how the Scheme is changing and will operated from 1 July until it closes on 31 October 2020. We await an updated Treasury Direction to bring these changes into force.

Here our employment law experts set out the changes and the tricky bits to note on:

• Who can be furloughed
• Utilising flexible furlough
• Submitting post 1July claims
• What should employers be doing now?
• Timeline

Who can be furloughed?

Who can claim from 1 July

It remains the case, that to be eligible to claim under the CJRS the employer must have:

1. a UK PAYE scheme started on or before 19 March 2020
2. enrolled for PAYE online
3. submitted a report under the Real Time Information (RTI) reporting system for that employee on or before 19 March 2020
4. a UK bank account

Now added:

5. furloughed that employee for at least three consecutive weeks between 1 March and 30 June 2020.

The new requirement means that from 1 July, the CJRS will only be available to employers that have previously used the Scheme in respect of employees they have furloughed for a full three-week period at some point between 1 March and 30 June (see exceptions below).

Restriction on number of those furloughed

As is the existing position, employers make a collective claim for the group of furloughed employees under the scheme (not for individual employees). From 1 July, the number of employees an employer can claim for in any claim period cannot exceed the maximum number of employees claimed for under any single claim ending by 30 June.

For example, an employer had previously submitted three claims between 1 March 2020 and 30 June, in which the total number employees furloughed in each respective claim was 30, 20 and 50 employees. Then the maximum number of employees that employer could furlough in any single claim starting on or after 1 July would be 50.

This will be a relevant consideration where the employer has been operating rotating furlough arrangements under the current rules as it may impact on how many staff it can bring back part time under flexible furloughing within a particular claim period.

There are limited exceptions for employees returning from some forms of family related leave (see below).

Minimum furlough periods

Until 1 July, the minimum furlough period remains three consecutive weeks. From 1 July, flexible furlough agreements can last any amount of time (including under three consecutive weeks) and employees can enter into a flexible furlough agreement more than once. Although flexible furlough agreements can last any amount of time, the period that an employer can claim for must be for a minimum claim period of seven calendar days, unless the furlough period bridges a month end (see below).

Transitional period

As stated above, the scheme will only be available to employers that have previously used the original scheme in respect of employees they have furloughed for a full three-week period before 30 June. The employee doesn't have to be on furlough at the point the new scheme is introduced on 1 July, provided that they have been validly furloughed before that. This will allow an employer to re-furlough employees who were subject to a rotating furlough arrangement before the introduction of the new scheme.

However, if a previously furloughed employee starts a new furlough period before 1 July this furlough period must be for a minimum of three consecutive weeks. This remains the case even if part of the three consecutive week minimum period runs after 1 July. For example, under a rotating furlough arrangement:

• Employee A furloughed for the three week period of 11 to 31 May, then returned to work.
• Employee B furloughed for the three week period of 1 to 21 June, then returned to work.
• Employee A goes back on Furlough on 22 June.

In the above scenario, the employer could potentially agree a flexible furlough agreement with Employee B from 1 July. However, a flexible furlough agreement can only be agreed with Employee A from 12 July, being three weeks after 22 June. It is not possible to convert the post 1 July portion of the three week furlough period to flexible furlough.

The family-related leave exceptions

Parents returning from statutory:

• Maternity leave;
• Paternity leave;
• Adoption leave;
• Shared parental leave; or
• Parental Bereavement leave

can be validly furloughed for the first time after 10 June (so without a full three...