Furlough guidance amended regarding notice and Treasury Direction published

Published 16 noviembre 2020

On Friday evening, 13 November, the Government made further amendments to the Coronavirus Job Retention Scheme (CJRS) Guidance and also issued an updated Treasury Direction, which forms the legal basis of the Scheme.

Claiming for employees on notice post 30 November:

As mentioned in our previous alert we reported that the Government was considering its position with regards to whether the furlough scheme would cover periods relating to notice from 1 December. The Guidance to the CJRS was amended again on Friday evening to cover this point. The Government is now saying definitively that for claim periods starting on or after 1 December, employers will not be able to claim a grant for any days on which the employee is serving contractual or statutory notice post 1 December. The Guidance states the following:

“For claim periods starting on or after 1 December 2020, you cannot claim for any days on or after 1 December 2020 during which the furloughed employee was serving a contractual or statutory notice period for the employer (this includes people serving notice of retirement or resignation). If an employee subsequently starts a contractual or notice period on a day covered by a previously submitted claim you will need to make an adjustment”.

Treasury Direction:

The Government also issued an updated Treasury Direction on Friday. This is the fourth Treasury Direction to be issued and essentially sets out how the CJRS will operate until 31 January 2021. The Scheme for February and March 2021 will be set out in a future Treasury Direction. The rules reflect most of the content already set in the Guidance and covered in our previous alert. However, there are a couple of things to note from the Treasury Direction:

• Purpose of the Scheme / Abuse: In this version of the CJRS the Government is keen to reduce any abuse of the Scheme. The Treasury Direction stresses that no CJRS claim may be made in respect of an employee if it is abusive or is otherwise contrary to the exceptional purpose of the CJRS. It states that it is integral to the purpose of CJRS that the amounts paid to an employer, pursuant to a CJRS claim, are only made by way of reimbursement of the expenditure incurred by the employer where “employment activities have been adversely affected by the coronavirus and coronavirus disease or the measures taken to prevent or limit its further transmission”.
  
  
• Publication of use: In a further nod to preventing abuse, we knew from the Guidance that HMRC will publish employer names for companies (including LLPs) and the company registration number of those who have made claims under the scheme for the month of December onwards. The Treasury Direction now states that the information to be published will also include the amount of the CJRS claim made by that employer or a “reasonable indication” of the amount claimed. An exception may be made for employers who can show that publication would expose their workforce to “serious risk of violence or intimidation”.

What does this mean for employers?

The changes regarding notice pay is an important step away from the position we have been used to since the introduction of the CJRS. Employers currently considering dismissals should therefore be mindful that the costs of notice pay after 1 December will no longer be covered by the Scheme.

In addition, now that use of the CJRS will be published, employers will also need to consider the PR/ brand implications as well as the economic considerations in deciding whether and how to use the Scheme.