Flexible Furlough Scheme: A guide to navigating the guidance

As we reported in our last furlough update detailing the furlough grant tapering from 1 August and the flexible furlough as from 1 July, on 12 June (Friday night) the Government published the further guidance on the operation of the flexible furlough scheme which will come into effect as from 1 July 2020.

The updated guidance is published by way of updates to the existing guidance and some new guidance documents which makes it fairly impenetrable.

The main ‘route in’ to the guidance is through the ‘Claim for Wages Through the CJRS’ page which is here:  https://www.gov.uk/guidance/claim-for-wages-through-the-coronavirus-job-retention-scheme.  That page will take you 6 further links listed in bullet points, four of which are by way of updates but two of which are new:

• Steps to take before calculating your claim: https://www.gov.uk/guidance/steps-to-take-before-calculating-your-claim-using-the-coronavirus-job-retention-scheme and
• Calculate how much you can claim: https://www.gov.uk/guidance/calculate-how-much-you-can-claim-using-the-coronavirus-job-retention-scheme.

There is in addition, a page dedicated to an example of how to calculate the furlough claim for those who are flexibly furloughed: https://www.gov.uk/government/publications/find-examples-to-help-you-work-out-80-of-your-employees-wages/example-of-a-full-calculation-for-an-employee-who-is-flexibly-furloughed.

This worked example is for an employee who works on a fixed monthly salary who works 40 hours a week and who has no commission, overtime, bonus or other ‘additional’ pay.  The complexity of the calculation can be seen for itself and that is for the most straightforward of employment remuneration arrangements.  For those who earn overtime, commission, bonus or have flexible hours, the calculations are going to be complex and for employers without the resources of a well staff HR, finance and payroll team, getting it right is going to be challenge and in reality a barrier to use. If the intention was to get everyone back to work gradually, this is not going to help; we anticipate that employers will decide to bring back fewer staff full time, rather than more staff part time and that is going to lead to business risks for unfair selection and claims that arise.

Aside from the nightmare of flexible furlough calculations, the main ‘headlines’ for the flexible furlough scheme are:

• The amount that can be claimed as from 1 August 2020 will be tapered, as we detailed in our previous update.
• The employee must have been furloughed for at least 3 consecutive weeks between 1 March and 30 June 2020; they must have been on the employer’s UK PAYE scheme started on or before 19 March 2020; they must have been enrolled for PAYE online; the employer must have submitted a report under the Real Time Information (RTI) reporting system for that employee on or before 19 March 2020 and have a UK bank account.
• The number of employees an employer can claim for cannot exceed the maximum number of employees they claimed for under any claim ending 30 June. So if an employer claimed for 20 employees in March, 30 in April and 50 in May and June, the maximum number of employees they can claim for after 1 July is 50 (subject to some exceptions that are listed in the guidance such as long returning from parental leave).  Subject to that, after 1 July, employers can bring employees back to work for any amount of time, in any work pattern and still be able to claim the grant for the hours the employees don’t work compared to the hours they would normally have worked.
• Flexible furlough will still need to be agreed with the employees (or via a collective agreement with a trade union).  Flexible furlough agreements can last for any amount of time and can stop and start but if an employee starts furlough before 1 July, they have to be on furlough for a minimum period of 3 weeks (so if a previously furloughed employee starts another period of furlough on 19 June, then they have to be on furlough until 10 July and only then can go onto the flexible furlough arrangements.
• As from 1 July, employers cannot make claims that cross calendar months so all furlough should be claimed up to 30 June (which can be submitted until 31 July) and then no claims should cross a calendar month.

The Furlough Advice & Support Team at Edwin Coe will continue to monitor and report on the situation as it develops.  If you have any queries, please contact them directly.

To review our previous Covid-19 updates, please click here.

 

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