Job Retention Scheme Update

The Job Retention Scheme has developed over the weeks of the pandemic and a Treasury Direction has now been issued which sets out the legal framework for the Scheme. Here are some points worth emphasising in relation to furlough:

1. Employees who were employed on 19 March 2020 (previously 28 February 2020) are eligible for furlough. Employers should have submitted real time information payroll data by that date .To claim furlough, the employer should instruct their employee to cease work and there should be an agreement to this effect . This is significant, employers must ensure they have written agreement (which could be by email) that the employee will cease all work in relation to their employment (furloughed). If the employer does not have agreement now they can continue to attempt to get it.
2. Paragraph 6.7 of the Direction qualifies what is meant by an “instruction” by providing that: “An employee has been instructed by the employer to cease all work in relation to their employment only if the employer and employee have agreed in writing (which may be in an electronic form such as an email) that the employee will cease all work in relation to their employment. “
3. The Scheme is not limited to those employees who would otherwise be made redundant. It applies to any who are furloughed "by reason of circumstances as a result of Coronavirus or Coronavirus disease". This is helpful for employers generally and means the Scheme has broad coverage for the pandemic. A director who is furloughed can only undertake work to fulfil a limited number of statutory duties.
4. The amount of salary/wages for the employee must disregard anything which is not "regular salary or wages" including a performance bonus, any conditional payments and any non-financial benefits.

Our Head of Employment, Iain Jenkins, has been putting together our updates. Please contact him on i.jenkins@mccormicks-solicitors.com  if you require any assistance.