New Treasury Direction Covers Flexible Furlough

On 25 June HM Treasury issued a further Treasury Direction on the Coronavirus Job Retention Scheme (CJRS), or ‘furlough scheme’, modifying the effect of the previous Directions made on 15 April and 20 May.

The new Direction sets out the rules that will apply under the CJRS from 1 July 2020 until 31 October 2020, when the scheme will end, including in relation to ‘flexible furlough’ arrangements and compulsory employer contributions to furlough costs.

As it should, the Direction essentially reflects the HMRC’s published guidance as last updated on 19 June in anticipation of the changes to the CJRS that are to take place after the end of June. The latest guidance for employers is here and that for employees is here.

For details of the changes to the scheme that are to take place after the end of June, see our 15 June blog and also the following points.

A point of note is that we questioned in our 15 June blog that HMRC’s guidance for employees stated that women on maternity leave must provide 8 weeks’ notice of an early return to work if they are to be furloughed on their return. However, the 19 June iteration of that guidance clarifies that this stipulation only applies to employees who are in receipt of maternity allowance. (As reflected in our 15 June blog, any employee can be required to provide 8 weeks’ notice of her early return from maternity leave if the employer complied with its obligation to notify her of the date that her full 52 weeks’ maternity leave was to end within 28 days of (i) the employee notifying it of her chosen start date for her maternity leave or, if applicable (ii) the automatic triggering of maternity leave by pregnancy-related absence in the 4 weeks before the expected week of childbirth or by premature birth – but the employer may, in its discretion, waive that requirement completely or agree to a shorter notice period.)

Note also that, subsequent to our 15 June blog, it was stated in the 19 June iteration of the guidance that an employee who is a military reservist returning to work following a period of mobilisation after 10 June may still be furloughed for the first time.

The conditions to the exemption for military reservists are that:

  • The employer has already claimed for another employee for a furlough period of at least three consecutive weeks between 1 March and 30 June.
  • The employee was away on a period of mobilisation that started before 10 June and returned after that date.
  • The employee was on the employer's PAYE payroll and the employer submitted an RTI submission for them on or before 19 March.

This exemption gives military reservists whose period of mobilisation ends after 10 June the same protection under the CJRS as employees whose statutory parental leave terminates after 10 June.

Also, when an employer is calculating the maximum number of employees that they can claim for under the CJRS from 1 July, the number of employees being furloughed for the first time after returning from military mobilisation should be added to any previous maximum (in  same way employees being furloughed for the first time after statutory parental leave). This means the maximum number of employees an employer can claim for in any pay period after 1 July is the maximum they claimed for in any one claim period before 30 June, plus any employees they are furloughing for the first time due to them returning from statutory parental leave or military mobilisation.