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‘Furlough Scheme’ extended to March 2021

Posted
November 13, 2020
Employment Law

It has been another interesting few days in the saga that is the coronavirus pandemic. Of particular note to those of us interested in employment law is the extension of the Government’s Coronavirus Job Retention Scheme (CJRS).

What's it all about?

The CJRS (aka ‘furlough scheme’) was due to close its doors for good on 31 October 2020. Rishi Sunak, the Chancellor of the Exchequer, had already announced that it would be replaced by the newly devised (and less generous) ‘Job Support Scheme’. However, given the recent decision to implement the month-long national lockdown here in England, the Government has clearly concluded that businesses really need the additional support the CJRS provides.

Initially, we were given to understand that the CJRS would only be extended for another month, until early December.  However, the Chancellor has now confirmed that the scheme will actually remain open until 31 March 2021. Furthermore, for now, the Government is reinstating the more generous levels of support previously in place back in August 2020. This means that the Government will fund up to 80% of an employee’s normal wages for any normal working hours not worked (up to a maximum of £2,500 per month). Employers will be expected to cover the cost of the relevant NICs and pension contributions. This more generous level of support is expected to remain in place until the New Year but will be subject to review for February and March 2021.

What about those already dismissed?

The change in Government policy has begged the question as to what happens to those employees who have recently been made redundant precisely because their employers thought the CJRS was closing. In an attempt to address this issue, the rules relating to the extended CJRS are expected to provide that those employees made redundant since 23 September 2020 can be re-employed by their employers and then placed on furlough under the CJRS. Readers will recall that a similar arrangement was put in place when the furlough scheme was first rolled out back in March. Of course, whether many employers wish to re-engage already dismissed employees is another matter.

What about employees who haven’t been furloughed before?

One final point to note is that under the extended furlough scheme, it is no longer necessary for newly furloughed employees to have been furloughed in the past in order for their employers to make a valid claim.

So, what now?

It's worth bearing in mind that it remains important for employers to clearly document the terms by which their staff are being furloughed, including their employees’ agreement to any necessary changes to their terms and conditions. If you need advice on how to ensure that you get the most out of the extended furlough scheme, please get in touch.

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