Employers have been expecting further guidance in relation to the Job Retention Scheme and on 4 April 2020, HMRC published updated Guidance. The updated Guidance clarifies some of the areas of confusion in the original HMRC guidance published on 26 March and the key points are as follows:
- Employees who have been dismissed for any reason since 28 February 2020 can be re-employed and then furloughed. Previous guidance provided that employees who had been made redundant could be rehired but the situation was unclear in relation to employees whose employment had terminated for other reasons;
- Employers must notify employees that they have been furloughed in writing and retain the records for at least 5 years;
- Employees must be furloughed for at least 3 consecutive weeks but can be taken on and off furlough provided that the 3 week condition is satisfied;
- Employees with two jobs can work for one employer while on furlough from the other and an employee who has been furloughed can also start a new job (subject to the old employment contract);
- Employers can reclaim 80% of compulsory commission back from HMRC, as well as basic salary;
- Directors can be furloughed but they can carry out statutory duties only during the furlough period; and
- Employees cannot be asked to do any work that makes money for or provides services to an employer, but employees can take part in volunteer work or training.
There are still some unanswered questions. What about annual leave taken during the furlough period? Should employees be paid at the furlough rate or normal rate of pay? The guidance is silent on this issue. Also unclear is what happens to employees who TUPE transferred after 28 February? If any further guidance becomes available, we will issue an update.
This article has been produced for general information purposes and further advice should be sought from a professional advisor. Please contact our Employment team at Cleaver Fulton Rankin for further advice or information.
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