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Coronavirus Job Retention Scheme update: Special Update 2nd November 2020

BY Heather Maclean
Employment Law & HR
BG Purple

Following the announcement on Saturday 31st October 2020 of further ‘lockdown’ restrictions affecting England in the coming week, the Treasury has announced that the Coronavirus Job Retention Scheme ‘CJRS’ i.e. furlough leave and pay, which was to have lapsed on 31st October, is to be extended for another month throughout the UK and that the Job Support Scheme ‘JSS’ is not being implemented until the end of the CJRS in December 2020.

This has two consequences for employers:

  1. If you wish to continue to keep employees on Furlough Leave, you have to have a new agreement. The good news is that the terms that applied in August 2020 will be available (see below);
  2. Any agreement that you have already made to go onto the JSS will be regarded as ‘frustrated’ or void as the scheme has been postponed by the government.

We advise that you write to employees whom you are unable to maintain on their contractual hours due to the effects of the Coronavirus pandemic and ask them to agree a new period of furlough leave and, if you have previously agreed a period of working under the JSS, that the agreement is void due to the scheme being withdrawn. It is necessary to confirm agreement to furlough leave and pay in writing.

The terms of the CJRS Furlough scheme for November 2020 will be set out more fully by the government in the coming days, but we do know the following:

  • Furlough leave can be full (with 80% of pay up to the £2,500 cap in support) or flexible, with employers paying for worked hours.
  • Employers have to cover only employer’s National Insurance and pension contributions for the furlough pay grant and the full cost of any hours worked- the government estimates that this is 5% of pay costs for most employers.
  • The claims system is being updated, with details to follow.

Who is eligible for furlough pay from November:

  • All employers with a UK bank account and a PAYE scheme.
  • Neither the employer nor the particular employee needs to have previously used the CJRS.
  • Employees must have been on the employer’s PAYE Real Time Information system by 23.59 hours on Friday 30th October 2020.
  • The reporting and claim period is for a minimum of 7 consecutive calendar days.
  • The government expects that fully publicly funded organisations will not use the scheme.

We don’t yet know what the reference salary will be for the calculation of furlough pay, the government’s announcement is silent about that. It does say that it will be broadly similar to previous iterations of the CJRS.

More details of the scheme will follow. Overall, the extension of the scheme and the reversion to August’s terms of 80% pay support (subject to the cap) mean that the CJRS should be relatively straightforward to implement once agreement is reached as to the pattern of work if using flexible furlough.

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