Flexible Furlough

Late on Friday 12th June the Government published updated guidance on the Coronavirus Job Retention Scheme.

The requirement for an employee to remain on furlough for three weeks is being removed from 1 July. This means that from 1st July employees will be able to work for some days (or part days) and be furloughed for others. For example, an employee could work on Monday, Tuesday and Wednesday and be furloughed on Thursday and Friday. The cap on the furlough grant will be proportionate to the hours not worked.

Any sort of working pattern is allowable under the flexible furlough scheme and there is no restriction on the length of time it must last. If you wish to agree a flexible furlough arrangement, you must enter into a new agreement with the employee. The rules about what an employee can and cannot do during any days they are furloughed remain unchanged.

Where you’re using flexible furlough, there are additional record keeping requirements and you must keep records of the usual hours worked by each employee (including details of the calculation used to ascertain usual hours) and the actual hours worked for six years.

A start date of 1st July for flexible furlough is not possible where a previously furloughed employee started a new three-week furlough period after 10 June. In that situation, the flexible furlough cannot start until those weeks have expired.

The guidance sets out extremely complicated rules for calculating the amount of grant which may be claimed in these circumstances.

The calculation varies depending on whether you have previously calculated the grant on the basis of a fixed salary or variable pay (depending on the hours worked). In each case you are required to calculate a “baseline” number of “usual hours” in order that it can be compared with the actual hours worked. The Government has prepared a number of examples to assist with the calculation and has updated its calculator.

The difficulties with calculation are exacerbated by the combination of the Government’s advice that you should not claim until you are sure of the exact number of hours an employee will have worked during the claim period and the need to ensure claims are contained within the same month. Claims can now be corrected if necessary.

You will be able to require some employees to return to work and allow others to remain on furlough. Ensure you make decisions about who returns to work in a non-discriminatory way.

Perhaps fortunately, flexible furlough is not compulsory and full furlough will remain available until 31 October with the required additional financial contributions.

NB With the exception of those returning from maternity or other family leave (such as shared parental leave),you can’t add new entrants to the revised furlough scheme. Only employees previously furloughed for three weeks before 30 June can continue to be part of the scheme after 1 July.

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DISCLAIMER

Although every effort has been made to ensure the accuracy of the information contained in this blog, nothing herein should be construed as giving advice and no responsibility will be taken for inaccuracies or errors.

Copyright © 2020 all rights reserved. You may copy or distribute this blog as long as this copyright notice and full information about contacting the author are attached. The author is Kate Russell of Russell HR Consulting Ltd.