At this most difficult time employees welfare must take first place. Ensure that you are able to support them as best you can in terms of hygiene at work, support for home working, etc.
Do not forget that when asking employees to work from home that other obligations will still apply such as GDPR compliance and such like. Make sure that these considerations are documented and that employees understand them – for example consideration may need to be given to confidentiality when on the telephone in a home environment.
Only once you have done that consider how the CJRS supports your plans or impedes them (for more information on CJRS see below).
Consider alternatives, such as:
You cannot force these but in the current situation employees are very understanding. The Government has put in considerable support for individuals who need it including suspending mortgages or rent, which should help those affected by reduced earnings, for whatever reason.
In the event of making redundancies a lot of help can be found on the ACAS website as to how to calculate redundancy pay and the steps that you must take, including guidance on consultation.
You will need to calculate the amount you are claiming. HMRC will retain the right to retrospectively audit all aspects of your claim.
HMRC will reimburse 80% of furloughed workers salaries, up to a cap of £2,500 per month and it is believed that the grant will also cover employer’s NIC and the basic employer’s pension contribution.
There are still many questions which will eventually be clarified by either the legislation, when it comes, or later on case law. The guidance note can be found here:
Many clients have asked whether employees can continue to support the business whilst furloughed (and making a claim under the CJRS). The guidance states:
Once you are on furlough you will not be able to work for your employer, but you can undertake training or volunteer subject to public health guidance, as long as you’re not:
If workers are required to for example, complete training courses whilst they are furloughed, then they must be paid at least the NLW/NMW for the time spent training, even if this is more than the 80% of their wage that will be subsidised.
In various conversations with other professional advisers it does therefore appear to be that a furloughed employee, whose “cost” is covered under the CJRS provisions cannot do any work for the employer – even if the employer “tops up” the pay!
The only exception to this is for furloughed Directors, who are allowed to carry out their statutory duty – for example signing off the Financial Statements.
In order to Furlough employees you will need to agree the change with your employees and you should consider taking appropriate legal advice, as it is possible that you will need to engage in a collective consultation process to agree the changes to the employee’s terms of employment.
Some employers, in particular, may want to consider the impact that furloughing employees has on their length of service and the consequences of retaining them rather than considering redundancies.
The funding is for and to the employer – and not the employee – in the event that it was wrongfully claimed then the employer will be liable to make good the over claim. At the time of writing it does appear that you can furlough employees, claim under the CJRS and then make them redundant – although it is not clear whether having done so the employer has to repay any or all of the grant!
We will seek to inform you with any critical updates as they occur, updating this Operational Guide for Management as necessary.
Should you have any comments, questions or wish to discuss any of the above with us or need help in deciding what to do please contact your usual EMC Consultant or Michael Pay on email@example.com or +44(0)1273 945 984.Back to all news