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Important reminders about flexible furlough and managing redundancy 03/08/2020

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The requirement for employer contributions to furlough costs is within sight, so we thought it might be helpful to offer some important reminders about the scheme and some key points if you are having to consider redundancies.

1. Job Retention Scheme – some key reminders

  1. You only had until 31 July to make claims for any periods of furlough up until 30 June.
  2. You can still only make one claim per period.  Whilst a period can be as short as 1 week, you cannot make a partial claim for some furloughed employees whilst putting other furloughed employees on a separate claim that covers the same period. 
  3. Remember that the maximum number of furloughed employees on a claim from 1 July can’t be more than your highest claim prior to 1 July, PLUS anyone returning from statutory parental leave, military service or if you have new employees from a TUPE transfer (but check the specific rules in the latter case).
  4. Make sure your furlough agreements with staff are up to date to reflect arrangements post 1 July.
  5. Keep a copy of all records relating to your claims including calculations, assumptions, agreements etc for 6 years.  HMRC are tightening up their compliance focus considerably.
  6. Check the HMRC website for calculation scenarios – if you can demonstrate you have followed their specific approach you will be in a good position.  As an example, the guidance uses calendar days to calculate variable pay, not just working days.
  7. A reminder of the claim contribution changes from 1 August is here:

These are just some important points to remember.  See our full guidance here:  Menzies Job Retention Scheme FAQS and the Government guidance here:  GOV.UK CJRS Guidance

2. Redundancies

We can unfortunately see redundancies starting to occur, although you may now be reassessing in light of the Chancellor’s announcements on 8 July about the ‘Job Retention Bonus’ available to companies who bring back their workers from furlough and keep them employed until next January Find out more about this on our Webinar on 20 August:

Key points to remember if you are in this situation:

  1. The requirements for fair selection and consultation processes for redundancy remain as normal.
  2. In light of the above, do not just assume that furloughed workers can be made redundant at the end of their furlough periods.
  3. The government legislated on 31 July 2020 to ensure that statutory redundancy payments and statutory notice calculations for employees being made redundant whilst on furlough are based on their full pay, rather than their reduced furlough pay. 
  4. Notice pay entitlements during furlough can be complicated according to what employment contracts say and whether the notice period is equal to or greater than statutory minima.  Please check with us if you are unsure.
  5. The aim of redundancy consultation is to avoid redundancy, and you may find employees more willing than ever to consider flexible options on pay and hours.  So consider creative ideas and suggestions.
  6. Remember that if you propose to make redundant 20 or more employees “at one establishment” in a 90-day period, there are very specific legal requirements for collective consultation and minimum periods etc, so please check the details with us if this might apply to you.

I hope these points are helpful but please let me know if you have other questions or there are other areas you would like to hear about in general.

Ed Hussey - Menzies Accountant

Ed Hussey – FCIPD

Director, People Solutions

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Ed Hussey - FCIPD

Director, People Solutions

Ed Hussey is Menzies People Solutions Director providing specialist outsourced HR consultancy to help businesses retain, reward & develop their employees.