Guidance and Legislation
The UK Government announced new legislation, The Employment Rights Act 1996 (Coronavirus, Calculation of a Week's Pay) Regulations 2020 on 30 July, which came into force on 31 July that ensures that furloughed employees receive statutory redundancy pay based on their normal wages, rather than at a reduced furlough rate. This has been achieved by altering the calculation of a "week's pay" as set out in the Employment Rights Act 1996. It therefore also applies to other statutory employment rights that depend upon calculating a "week's pay" including notice pay, the basic award for unfair dismissal and failure to provide a written statement of reasons for dismissal. ACAS has updated its Guide to managing staff redundancies to reflect the change.
After some confusion caused by the flexible furlough guidance initially suggesting that the furlough grant could be used to pay statutory notice without reference to contractual notice the main employer guidance has now been updated to clarify that "You can continue to claim for a furloughed employee who is serving a statutory or contractual notice period, however grants cannot be used to substitute redundancy payments."
More new guidance relating to the CJRS scheme has been published by the UK Government. This covers what employers should do if they have made errors when calculating claims and the penalties they will face for failing to report overpayments. The If you've claimed too much or not enough from the CJRS guidance sets out how HMRC should be notified of any errors, the timescales for doing so and how they can be rectified. The Penalties for not telling HMRC about CJRS grant overpayments guidance sets out how HMRC decides how much the penalty will be, when you have to pay a penalty and how to appeal against a penalty.
The Summer Economic Update which was delivered on 8 July announced a £1,000 job retention for employers who bring workers back from furlough and retain them until the end of January 2021. The Chancellor also confirmed that there would be no further extension to the Coronavirus Job Retention Scheme and so it will end on 31 October 2020. The policy paper published after the Update provided some further details of how the job retention bonus will work. To qualify for the £1,000 employees need to be continuously employed until the end of January 2021, and must earn, on average, above the Lower Earnings Limit of £520 per month. The bonus will be paid in February 2021. More details are available here.
The UK Government have published some minor changes to CJRS guidance notes. These clarify:-
- Any time that a flexibly furloughed employee is on holiday during a relevant claim period should be counted as furloughed hours not working hours
- Employees should not be placed on furlough simply because they are on holiday however - doing so could be regarded as abuse of the scheme
- Where employees working on a flexible work time arrangement can accrue time of in lieu of additional hours rather than being paid for them, the hours taken as additional paid leave count as furloughed hours
- Where employers have been overpaid due to an error but are not making any more CJRS claims they should contact HMRC for a payment reference number and then make a re-payment
In addition, there is a new example showing how to calculate a variable hours employee's average hours where they have taken adoption leave.
The English guidance on returning to work safely has been updated and now includes advice for employers on:-
- Taking steps to avoid individuals needing to raise their voices to communicate in the workplace
- Ensuring staff contact details are up to date for contract tracing purposes
- Putting in place a COVID-19 outbreak plan and having a nominated single point of contact for communication with PHE health protection team
July saw the percentage of furloughed workers rise to nearly one third of the UK workforce. This equates to 9.4 million employees with 1.14 million employers having made at least one claim under the CJRS. The total claimed by the end of June was £26.5 billion.
Despite the large number of furloughed employees, a survey of 191 HR professionals by XpertHR shows that employers expect nearly half of those currently furloughed to be back full time by September. A further 19% are expected to be working part time under the new flexible furlough initiative.
For parents that have been working during lockdown, but doing so from home, it seems very few are keen to revert to the old "normal". A survey carried out for nursery provider Bright Horizons of 1,500 people suggests parents have realised that large parts of their jobs can be done from home, and they think their employer will agree. Almost half are considering asking for more remote working, while only 13% want to go back to how things were pre-pandemic. According to research by the Adecco Group, 77% of employees both with and without children are hoping for a mix of office based and remote working, although many are concerned their employer's expectations of hybrid working will not match their own.
The inevitable first arrest relating to CJRS fraud was made in July. The man from Solihull is suspected of defrauding the scheme out of £495,000.
Following a petition calling for the UK Government to extend maternity leave by thee months with pay in light of the COVID-19 pandemic, the House of Commons Petitions Committee published a report making recommendations on the changes that could be made to current family friendly rights. The Government have two months to respond to the petition. The recommendations included:-
- Extension of maternity and adoption leave by three months with pay
- Consider whether greater protection from unfair dismissal is needed for employees who are pregnant or new parents
- Clarifying employers obligations to pregnant employees including the need to suspend them on full pay if they cannot work safely and putting them on furlough
We will provide an update on this as matters progress.