Important Furlough News
 
Sentient Group Ltd
 
Info Update 2020/20                                                         Issue Date: 16/04/2020
 
More Furlough News – Claiming the 80%
 
Things continue to change at a pace and just when you thought we were getting a firm grip on Furlough related matters here comes another change to update you on.

Under powers conferred by the Coronavirus Act 2020 The Treasury has issued a new Direction to HMRC, containing authority and instructions for making payments under the Coronavirus Job Retention Scheme.

The Direction issued on 15th April 2020 comes long after many employers have already taken the difficult decision to furlough employees in line with the guidance issued at that time.

Included in the new Direction is one subtle, but significant, difference from the previous guidance. Previously employers had to ‘notify’ employees that they were being furloughed in order to claim, whereas the new requirement states that the employer and employee must have agreed this ‘in writing (which may be in an electronic form such as an email)’. This puts a whole new complexion on the ability of the employer to claim the 80% back.

So what might this mean for those already on Furlough?
If you invoked a contractual right to lay employees off, confirming in writing that they have been placed on furlough in line with the layoff clause in the Employee Handbook this remains sufficient from a contract of employment point of view BUT - as of yesterday - it may not be sufficient to ensure recovery of the 80% of employees wage costs under the scheme.

As the wording of the Direction now puts this in some doubt we strongly advise that anyone that has been placed on furlough should be asked to sign a new furlough agreement.

Another subtle change in the Treasury Direction suggests any agreement to be furloughed cannot be conditional upon the monies being recuperated from the CJRS. It is debatable whether some of the wording used in our previous documents (specifically the aspect of making adjustments to monies paid to achieve parity with what can be claimed once you know how much you will get back) could be interpreted as being ‘conditional’. 
 
As a consequence and to be on the safe side, we have changed our Furlough document in light of the above to protect the ability to claim back the 80%.

Whilst we understand that employers will have made concerted efforts to place their staff on furlough this updated document covers all employees whether you have a lay off clause or not and reduces the risk of HRMC refusing to meet your CJRS claims.

Our HR clients can access the updated document through our member log in here. If you are not entitled to access our document library, but would like to, please contact us on info@sentientuk.co.uk. If you used your own letter, then it is recommended that you either get that annotated or obtain email confirmation from furloughed employees that they agree to being on furlough. 
 
 
The advice and comment in this update is not meant to be an authoritative statement of the law. The articles and summaries should not be applied to any specific set of facts and circumstances without seeking further advice. Whilst every care is taken to ensure that the content is correct Sentient cannot accept responsibility for the accuracy of statements made nor the result of any actions taken by individuals after reading such.
 
 
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