Julian Taylor

From 1 August the clinically extremely vulnerable were no longer required to “shield” and could potentially return to work. This is not a green light to require everyone to return to the workplace, and care should be taken to ensure you are following government guidance, as well as acting sensitively towards the needs of this vulnerable group. 

The government’s updated guidance for the clinically extremely vulnerable now states “you can go to work as long as the workplace is Covid-secure, but should carry on working from home wherever possible. You may be able to take up an alternative role or change your working patterns temporarily. If you need support to work at home or in the workplace , you can apply for Access to Work. Access to Work will provide support for the disability-related extra costs of working that are beyond standard reasonable adjustments an employer must provide … As of 1 August you are no longer eligible for Statutory Sick Pay (SSP) on the basis of being advised to shield by the government. Your employer should help you to transition back to work safely and support you to maintain good hand hygiene and distancing practice in your workplace if you are unable to work from home.”  https://www.gov.uk/government/publications/guidance-on-shielding-and-protecting-extremely-vulnerable-persons-from-covid-19/guidance-on-shielding-and-protecting-extremely-vulnerable-persons-from-covid-19

The government’s various sector specific guides on working safely during coronavirus have also been updated. Do note that the amendments are not uniform across the board, so we recommend you look at your sector-specific guidance depending upon the nature of your workplace – some of the guides state that those who are clinically vulnerable should be offered the safest available on-site roles if they are unable to work from home.  https://www.gov.uk/guidance/working-safely-during-coronavirus-covid-19

Regardless of the government’s advice, employers should take care before requiring a clinically extremely vulnerable employee to come back into the workplace and carry out their own risk assessment. Risk assessments should be undertaken to identify any particular risks taking into account the nature of the workplace, the role, and the nature of their condition. Thought should also be given to whether there are any adjustments or adaptations that would be made to the employee’s role or work area (many former shielders will be disabled within the meaning of the Equality Act 2010). Depending on the circumstances you may need to obtain advice from occupational health or a suitably qualified medical practitioner on whether the individual can return and any adjustments that might facilitate that safely.

Given that many people in this situation may still not feel it is safe to return to work, employers should be prepared to discuss other options such as furlough or unpaid leave. Do contact us if you are concerned about how to handle the potential return to work of any former shielders.

1. Calculating weekly pay

On 31 July 2020, the Employment Rights Act 1996 (Coronavirus, Calculation of a Week’s Pay) Regulations 2020 (SI 2020/814) came into force. These provide that if an employer makes a furloughed employee redundant, the employer will need to calculate statutory redundancy pay and statutory notice pay (among other payments listed below) with reference to the employee’s normal pay and not with reference to their reduced furlough pay. Previously, in a limited number of cases for employees whose pay varies with the time of or amount of work, or who have no normal working hours, there was a loophole allowing employers to make statutory payments based on less generous furlough pay (80% of normal pay, capped at £2,500 per month).

The Regulations provide that statutory entitlements based on a week’s pay and connected with termination of employment are not reduced as a result of an employee being furloughed under the Coronavirus Job Retention Scheme (CJRS). The affected entitlements are redundancy pay, statutory notice pay, remuneration for time off to look for employment or arrange training and compensation awards in tribunal including awards for unfair dismissal, failure to provide a written statement of reasons for dismissal, and failure to comply with an order for reinstatement or re-engagement. The Regulations provide a number of special calculations of a week’s pay for those employees who are or have been furloughed, with different calculation options being provided depending upon an employee’s pattern of work. The Regulations also include provisions on how a week’s pay is to be calculated for the purpose of deciding whether an employee is taken to be on short-time for statutory purposes.

The scheme is short term and will cease to apply when the relevant statutory entitlements are no longer affected by an employee having been furloughed.

It is important to note that the new rules apply only to payments from 31 July 2020, so some employees that have already been made redundant will not have been covered. In addition, the normal statutory cap on redundancy payments (on or after 6 April 2020 weekly pay is capped at £538) will still apply, so in many cases the impact of the change will be limited. Similarly if an employee’s notice period is at least one week more than the minimum statutory notice period these calculation provisions do not apply when calculating notice pay, so there is still scope to make lower notice payments in certain cases.

For further general details see

https://www.gov.uk/government/news/new-law-to-ensure-furloughed-employees-receive-full-redundancy-payments

For the calculation details see

https://www.legislation.gov.uk/uksi/2020/814/made

Please do contact us for advice if you need support with your calculations.

2. Further HMRC guidance

Given the evolving nature of the CJRS employers may be concerned about previous claims they have made. On 28 July 2020, HM Revenue & Customs (HMRC) published two new guidance documents for employers on what to do if they have claimed too much or too little under the CJRS (the Errors uide) and the penalties they will face if they fail to report overpayments (the Penalties guide).

The Errors guide

The Errors guide expands upon information that previously appeared in the HMRC Claim guide. In relation to overpayments, it confirms that employers must notify HMRC and make repayments. It sets out the process they should follow to do this and the relevant deadlines (the consequences of failure to comply are provided in the linked Penalties guide). If employers have claimed too little, the Errors guide confirms that they can inform HMRC and amend their claim. Historic claims for the period up to 30 June are now closed. Employers are also reminded that even where they have claimed too little, they must make the correct payments to employees.

The Penalties guide

The Penalties guide confirms that HMRC can recover any overpayment through an income tax charge, with interest and penalties on late repayments. If employers fail to notify HMRC of any overpayment, penalties may be imposed of up to 100% of the overpayment where HMRC believe that the employer’s failure was deliberate and concealed (in accordance with the Finance Act 2020, in force on 22 July 2020).

For further details on the Errors guide see

https://www.gov.uk/guidance/if-youve-claimed-too-much-or-not-enough-from-the-coronavirus-job-retention-scheme

and for the Penalties guide

https://www.gov.uk/government/publications/penalties-for-not-telling-hmrc-about-coronavirus-job-retention-scheme-grant-overpayments-ccfs48

On 31st July 2020 new guidance was released on the Coronavirus Job Retention Bonus scheme. https://www.gov.uk/government/publications/job-retention-bonus/job-retention-bonus

The scheme provides a one-off payment to employers of £1,000 for each employee that was previously furloughed and who remains continuously employed on 31st January 2021. To be able to claim for an employee, they must earn at least £520 a month on average between 1 November 2020 and 31 January 2021. Claims can be made by employers after January’s PAYE has been filed, and payments can be expected from February 2021. Failure to maintain good payroll records and data relating to furlough may jeopardise an employer’s claim, so employers are urged to ensure their records are well maintained. More details about the claims process is expected in September 2020.

After the confusion caused by the third treasury statement, the Government have clarified the position on whether furlough can be claimed to cover notice payments for employees facing redundancy. The answer appears to be a categoric “yes” with the Gov.UK guidance including, under the heading “If you’ve made your employees redundant”, the following statement:

“Where you must make redundancies, you should do so in accordance with the normal rules. This includes giving a notice period and consulting staff before a final decision is reached. 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.”

This, hopefully, will ensure that such claims will not be queried in future HMRC audits.

On 8 July the Treasury published its “Plan for Jobs” setting out its plans for protecting jobs and facilitating a financial bounce back. It confirmed that the Coronavirus Job Retention Scheme (CJRS) will end in October after its phased wind down. The government has suggested a four stage response:

• introducing a new Job Retention Bonus to encourage businesses to retain furloughed workers
• supporting job hunters with direct help to find work and to gain the skills people need to get a job
• protecting jobs in the hospitality and accommodation sectors and at attractions by attempting to encourage demand
• creating jobs with action to get the property market moving and to increase and bring forward infrastructure investment.

Employees

To encourage employers to continue the employment of furloughed workers the government announced its intention to introduce the Job Retention Bonus, a one-off payment of £1,000 to UK employers for every furloughed employee who remains continuously employed through to the end of January 2021. To qualify, employees must earn above the Lower Earnings Limit (£520 per month) on average between the end of the scheme and the end of January 2021. Payments will be made from February 2021. We are informed that further detail about the scheme will be announced by the end of July.

Younger unemployed proposals

For younger unemployed workers aged 16–24 the government proposes, in its Kickstart programme, that funding will be made available for six month placements which will cover 100% of the relevant National Minimum Wage for 25 hours a week, plus the associated employer National Insurance contributions and employer minimum automatic enrolment contributions.

The government has also announced that it will provide an additional £111 million this year for traineeships in England, to fund high quality work placements and training for 16–24 year olds. The government will fund employers who provide trainees with work experience, at a rate of £1,000 per trainee. The government will expand eligibility for traineeships to those with Level 3 qualifications and below, to increase access to the scheme.

Payments for employers who hire new apprentices – The government will introduce a new payment of £2,000 to employers in England for each new apprentice they hire aged under 25, and a £1,500 payment for each new apprentice they hire aged 25 and over, from 1 August 2020 to 31 January 2021. These payments will be in addition to the existing £1,000 payment the government already provides for new 16–18-year-old apprentices, and those aged under 25 with an Education, Health and Care Plan – where that applies.

The government is also proposing to provide £101 million for the 2020–21 academic year to give all 18–19 year olds in England the opportunity to study targeted high value Level 2 and 3 courses when there are not employment opportunities available to them.

Other steps

The government is also proposing investment in Department for Work and Pensions (DWP) Jobcentres to assist jobseekers of all ages but with targeted assistance for younger unemployed.  In addition the Stamp Duty freeze and Green Homes Grants and government infrastructure spending are hoped to boost the housing and building sectors. The lowering of VAT (to 5%) in the food and entertainment sectors between 15 July 2020 and 12 January 2021 and the August “Eat out to help out” scheme have been suggested to support businesses and jobs in the hospitality sector and entertainment sectors.

Since the publication of the third Treasury Direction on 25 June 2020 there has been some recent discussion of whether the CJRS claims can be made to cover the salaries of employees who are serving notice periods because of redundancy. The concern was caused by the introduction of additional wording in a new paragraph 2.2. This has added in what could be seen as a new provision to claiming under the scheme stating that (the highlighting is ours):

“Integral to the purpose of the CJRS is that the amounts paid to an employer pursuant to a CJRS claim are used by the employer to continue the employment of employees in respect of whom the CJRS claim is made whose employment activities have been adversely affected by the coronavirus and coronavirus diseases or the measures taken to prevent or limit its further transmission.”

This has led to suggestions that a claim should only be made where the payment will be used to continue employment. If this is correct, it may not be consistent with the purpose of the scheme to seek reimbursement in respect of those employees who are working under notice.

The guidance

The published guidance for employees who have been furloughed continues to state that employees can be made redundant while on furlough or afterwards and guidance for employers still makes reference to employees’ redundancy rights continuing to apply while they are furloughed.

The meaning of “to continue employment”

However, the Treasury Direction amendment to say that “integral to the purpose” of the scheme is that the grant is used by the employer “to continue the employment of employees” has caused concerns as the Direction now arguably contradicts the guidance and previous Treasury Directions. Employees are of course still in employment during notice periods but a possible interpretation of the new wording is that employers should only use the scheme for as long as they are trying to keep jobs open and should stop using the scheme once they have given notice of redundancies.

The HMRC customer helpline is reportedly confirming claims from the fund can be made for notice periods but this is a verbal and not a legally binding view and there is no written confirmation.

Particular risk

The risk of scrutiny of a claim will be increased if an employer has served notice of redundancies immediately after placing employees on furlough. The underlying purpose of the Coronavirus Job Retention Scheme is to allow employers to maintain their workforce, so there is some risk that HMRC will question a quick move to redundancy if it looks like the employer’s intention was to make redundancies at the outset and has just been using the CJRS scheme to fund the notice period. However, we can see arguments that the reference to using the grant to “continue the employment of employees” does not refer to specific employees and it can be argued that, by using the scheme to contribute to the notice pay of some employees, you can avoid having to make deeper cuts elsewhere.

So whilst we think that you can claim under the scheme it is worth assessing the circumstances of the redundancies. If you are not prepared to take the risk and want to return payments this is possible under the scheme. It would be wise to bear in mind the likely penalties regime when making this decision.

Penalties

Under draft legislation issued on 29 May (which are planned to be incorporated into the Finance Bill due to be enacted this month) HMRC will have the power to raise income tax assessments to recover CJRS payments from employers who were not entitled to the payments, or where the payments have not been used to pay furloughed employee costs (giving HMRC power to make a company officer jointly and severally liable where the officer has deliberately made a claim to which the company was not entitled). HMRC will also be able to charge penalties in cases of deliberate non-compliance or where a person who has claimed a CJRS payment deliberately does not use it for the costs it was intended to reimburse. At present it is suggested that the normal 30 day period for self reporting is extended to 90 days for the purpose of the legislation due to the complexities of the scheme. It may be sensible to review the position on claims within the 30/90 day period in light of whatever the latest guidance is at that stage to avoid possible penalties. 

The Government updated the official guidance on the Coronavirus Job Retention Scheme (CJRS) on 12 June. The updated guidance now includes details of how the scheme is to be wound down between July and October, introducing the flexible furlough scheme, which was initially announced on 29 May.

It reflects the Chancellor’s announcement that, from 1 July, employers will only be able to furlough employees who have already been furloughed for the minimum period of three weeks, meaning that the last date on which employers could furlough employees for the first time was 10 June save for the limited exception set out below.

Making claims under the scheme – new timescales

New guidance is provided on the timing of claims under the amended scheme and the closing dates for claims under the old scheme.

• The first time you will be able to make claims for days in July will be 1 July. You cannot claim for periods in July before this point.
• 31 July is the last day that you can submit claims for periods ending on or before 30 June.

Flexible furlough

Employers will be able to implement ‘flexible furlough’ from 1 July, including part-time arrangements.

The part-time arrangement is calculated on hourly rates. You will need to agree how many hours your flexibly furloughed employee is going to work in the claim period and record this in a written agreement. They will be furloughed for the rest of their usual hours. The employer will have to pay employees in full for hours worked.

The number of furloughed hours is calculated by subtracting the number of hours the employee actually works in the claim period (even if this is different to what you have agreed) from their usual hours. If you claim in advance and your employee works for more hours than you agreed, then you’ll have to pay some of the grant back to HMRC by correcting your claim. Record keeping is going to be important.

The minimum furlough period (currently three consecutive weeks) will no longer apply – flexible furlough agreements can last for any period.

Changes to the payment scheme: Tapering provisions

A new document sets out the detail of how CJRS grants will be tapered over the next few months.

• From 1 August, employers will have to pay employer NI contributions and employer pension contributions, with the CJRS continuing to pay 80% of wages up to a cap of £2,500.
• From 1 September, employers will also have to pay 10% of wages, with the CJRS paying 70% (capped at £2,187.50).
• From 1 October, employers will have to pay 20% of wages, with the CJRS paying 60% (capped at £1,875).

For details of the changes see guidance at: https://www.gov.uk/government/publications/changes-to-the-coronavirus-job-retention-scheme/changes-to-the-coronavirus-job-retention-scheme

Calculating payments under the flexible furlough scheme

The updated guidance includes worked examples of how to calculate pay, National Insurance and pensions elements for a flexibly furloughed employee. These are complex given the number of different payment patterns staff have. Employers are going to have to set time aside to understand how to calculate grants carefully where part-time working and tapering provisions apply.

See guidance at: https://www.gov.uk/government/publications/find-examples-to-help-you-work-out-80-of-your-employees-wages/examples-of-how-to-work-out-80-of-your-employees-wages-national-insurance-contributions-and-pension-contributions#workout-variable-hours

Exceptions

The updated guidance also acknowledges the announcement made by HM Treasury on 9 June that the 10 June cut-off for furloughing employees for the first time will not apply to those returning from family-related leave. Employees returning from maternity, adoption, paternity, shared parental or parental bereavement leave will still be eligible for the furlough scheme even if they have not previously been furloughed by 10 June, but only if the employer has previously used the furlough scheme for other eligible employees before that date.

Links to all of the updated guidance are available at: https://www.gov.uk/government/collections/coronavirus-job-retention-scheme

On 29 May Rishi Sunak announced further details about the extension to the Coronavirus Job Retention Scheme (CJRS).  We set out the key details below.

Important dates

It’s important to note that the CJRS will close to new entrants from 30‌‌ June 2020. From this point onwards, you will only be able to furlough employees that you have already furloughed for a full three-week period prior to 30‌‌ June. This means that the final date that you can furlough an employee for the first time will be 10‌‌ June 2020 for the current three-week furlough period to be completed by 30‌‌ June.

Employers will have until 31‌‌ July 2020 to make any claims in respect of the period to 30‌‌ June.

The CJRS will close on 31 October 2020.

Flexible furloughing

From 1‌‌ July 2020, employers will have flexibility to bring previously furloughed employees back to work on a part-time basis. The government will continue to pay 80% of wages for any of their normal hours they do not work up until the end of August. This flexibility comes a month earlier than previously announced, with the aim of getting people back to work.

Employers will be able to decide the hours and shift patterns that employees will work, and will be responsible for paying their wages in full while they are working. This means that employees can work as much or as little as the business needs, with no minimum time limits on the amount of furlough. 

To take advantage of this flexibility, any working hours arrangement that an employer agrees with an employee must cover at least one week and be confirmed to the employee in writing.

When an employer claims the government grant for furloughed hours, they will need to report and claim for a minimum period of a week. An employer can choose to make claims for longer periods such as on monthly or two weekly cycles if preferred. The employer will be required to submit data on the usual hours an employee would be expected to work in a claim period and the actual hours worked.

Note that if employees are unable to return to work, or the employer has no work for them to do, they can remain entirely furloughed and the employer can continue to claim the grant for their full hours under the existing rules. 

Employer contributions

From August 2020, the government grant provided to employers through the job retention scheme will be tapered.

• In June and July, the government will pay 80% of wages up to a cap of £2,500* as well as employer National Insurance (ER NICs) and pension contributions for the hours the employee doesn’t work – employers will have to pay employees for the hours they work (and cover NI and pension costs on those sums).
• In August, the government will continue to pay 80% of wages up to a cap of £2,500* for the hours the employee does not work, but employers will pay the ER NICs and pension contributions.
• In September, the government will pay 70% of wages up to a cap of £2,187.50* for the hours the employee does not work. Employers will pay ER NICs, pension contributions and 10% of wages to make up 80% of the total up to a cap of £2,500*.
• In October, the government will pay 60% of wages up to a cap of £1,875* for the hours the employee does not work. Employers will pay ER NICs, pension contributions and 20% of wages to make up 80% of the total up to a cap of £2,500*.

*It is important to remember that the cap on the furlough grant will be proportional to the hours not worked.

Note that if you are a smaller employer, some or all of your employer NIC bills may be covered by the Employment Allowance, so the impact of this tapering will not be as great. 

Guidance and support

We have been told we can expect further government guidance on how to calculate claims with this extra flexibility by 12‌‌ June, and that this will include webinars and detailed online guidance. 

Contractual issues

To be eligible for ongoing grants under the CJRS, employers must agree arrangements with their staff and confirm those agreements in writing. This means any extensions or arrangements for flexible furloughing will need to be fully documented.

For a link to further information, and an HM Treasury Factsheet, see here:

https://www.gov.uk/government/news/chancellor-extends-self-employment-support-scheme-and-confirms-furlough-next-steps

If you will be requiring staff to undergo coronavirus testing, or asking them to share whether or not they or anyone they live with have experienced any symptoms of coronavirus or come into contact with anyone who has, then you will be processing “special category” information for the purposes of the GDPR.  This requires consideration of which lawful basis you are relying on to process that data, and whether you should be conducting a data protection impact assessment or updating employee privacy notices.  The Information Commissioner’s Office has published guidance on testing and processing coronavirus health data.  It’s a recommended read for all employers.

https://ico.org.uk/global/data-protection-and-coronavirus-information-hub/data-protection-and-coronavirus/workplace-testing-guidance-for-employers/

Various sets of sector specific guidance (covering: 1. construction and other outdoor work; 2. Factories, plants and warehouses; 3. labs and research facilities; 4. offices and contact centres and similar indoor environments;  5. working in other people’s homes; 6. restaurants offering take away or delivery; 7. shops and similar environments; and 9. work in or from vehicles (including couriers and drivers)), set out a framework of measures that should be considered and implemented to achieve safe working.  Employers should be looking at these and planning for how they will look after staff in any transition back to work. 

The guidance can be found at:

https://www.gov.uk/guidance/working-safely-during-coronavirus-covid-19

The current overarching guidance is that people should continue to work from home wherever possible, but where this is not possible workers should travel to work if their workplace is open.