COVID-19 FURTHER UPDATE: THE CORONAVIRUS JOB RETENTION SCHEME (26 May 2020)
27th May 2020
On 20 May 2020 HMRC published a Direction modifying the effects of the Coronavirus Job Retention Scheme as set out in the Schedule to the Direction made on 15 April, 2020.
You can find a link to the Direction dated 20 May 2020 here:-
Here is a Summary of the changes:-
• Paragraph 6.8 contains more details of the training furloughed employees may undertake. It provides that the purpose of the study or training is to improve either an employee’s effectiveness in the employer’s business or the performance of the employer’s business. It must not directly provide a service to the employer or the business activities of the employer or contribute to the business activities of the employer or anything generating income or profit for the employer. Likewise it must not contribute to any significant degree in the production of goods the employer intends to supply or in the making to any person of a supply of services for a consideration by the employer;
• Paragraph 7.12 confirms that employers do not need to make a payment to employees in advance of claiming reimbursement from the CJRS, provided they intend to pay employees within a reasonable period of time;
• In terms of Paragraph 9.4, the date by which an employee must have transferred under TUPE in order to be eligible for furlough has been changed from 19 March 2020 to 28 February 2020, reflecting the amendment date in HMRC’s Guidance;
• Paragraph 6.7 removes the requirement for an employee to agree in writing to be furloughed. However the employer must put in place a written Furlough Agreement setting out the employee’s terms and conditions which is incorporated into their contract and retained until 30 June 2025;
• Paragraphs 7.1 to 7.19 provides greater detail than the first Direction in relation to what is included in an employee’s regular salary or wages that may or may not be claimed under the CJRS; and
• Paragraph 6.3 purports to clarify the interaction between Statutory Sick Pay and Furlough Grant but still leaves a degree of uncertainty. An employee who qualifies for SSP when initially placed on furlough leave should be paid SSP. It is only after the end of the period of incapacity for which SSP is in payment or due to be paid that the employee then receives furlough pay for which the employer can claim the grant under the CJRS.
Please remember that we at WJM are here to help during this exceptionally difficult time, please don't hesitate to get in touch if there is anything you think we can help with.
For any advice in relation to any particular aspects of the above, please contact a member of the Wright, Johnston & Mackenzie Employment Team: Martin Stephen (firstname.lastname@example.org), Liam Entwistle (email@example.com), Andrew Wilson (firstname.lastname@example.org) and John Grant (email@example.com).
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