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The Coronavirus Job Retention Scheme update

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By Lucy Farrow-Smith

The Chancellor has recently announced that the Coronavirus Job Retention Scheme, as discussed in our previous article, will now be extended across the UK until 31 March 2021. Guidance on how the scheme would operate during this extension was published on 10 November.

What are the key changes?

  • The new guidance confirms that employers are able to furlough employees who are unable to work because they are clinically extremely vulnerable or at high risk of severe illness from coronavirus and are following public health guidance, or who are unable to work because they have caring responsibilities resulting from COVID-19 - for example, childcare commitments.

  • From 1 November until 30 November 2020, employers can carry out redundancy consultation and give notice to employees while still claiming a grant. However, for claim periods starting on or after 1 December 2020, employers cannot claim for any days on or after this date during which an employee is serving a contractual or statutory notice period. This prohibition against claiming a grant for employees serving notice also applies to resignations, retirements etc. If employers wish to use the scheme to cover notice pay during all or part of an employee’s notice period, they now have limited time to do so.

  • Employees who were made redundant or stopped working for their employer on or after 23 September can be re-employed and furloughed by their former employer. To be eligible, employees must have been employed by their employer on or before 23 September 2020 - the employer must have made an RTI submission to HMRC from 20 March 2020 to 23 September 2020, notifying a payment of earnings for that employee. Employees on fixed-term contracts that have expired since 23 September 2020 can also be re-employed and claimed for. It is worth noting that, although this sounds positive, re-hiring in these circumstances has both practical and legal difficulties for employers – for example, if they have already paid for notice periods and statutory redundancy pay.

  • The guidance says that a new employer can make a claim under the scheme for employees that have transferred to it pursuant to TUPE if they were employed by the old employer on or before 30 October 2020 and transferred from the old employer under TUPE on or after 1 September 2020.

Payment

Claims made for November must be submitted to HMRC by 14 December 2020 and claims relating to each subsequent month should be submitted by day 14 of the following month, unless it is a weekend, in which case claims should be submitted on the following Monday.

Moving forwards

The government will review the scheme again in January 2021 to decide whether economic circumstances are improving enough to ask employers to contribute more. The Job Support Scheme (both Closed and Open), as discussed in our previous article, has been postponed and the Job Retention Bonus has been withdrawn, with talks of a retention incentive being available at the appropriate time.

For further information, please contact anthony.wilcox@twmsolicitors.com

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