Newsflash: Updates to Furlough Guidance for Charities & Social Enterprise

Newsflash: Updates to Furlough Guidance for Charities & Social Enterprise

In the last week the government has released two further versions of the Coronavirus Job Retention Scheme guidance.

Furlough Guidance – Version Three

Published late on Thursday 9 April 2020, the third version of guidance introduced some major changes, one of the most significant being the removal of redundancy as a criteria for shielded employees to be eligible for furlough.

Here are some other major changes and clarifications:

  • The guidance introduced the possibility of switching between furlough and SSP (but why would the employee report sick and get the lower SSP?).
  • It accommodated work visas.
  • It confirmed that, although employees can work for another employer during furlough, the employers cannot be linked or associated.
  • It clarified that furlough does apply to staff who TUPE transferred after 28 February 2020.

Update Guidance and New Legislation Published 15 April

Yesterday afternoon (15 April 2020), the government published yet another update to the guidance, along with a “Direction” to HMRC – effectively the legislation governing the furlough process.

The fourth iteration of the scheme guidance has changed very little since version three (see above). The one big change relates to the cut-off date for employees to have started work with you. Previously you had to have employed them on 28 February 2020 to be eligible; now the cut-off is 19 March 2020. This brings many more employees into scope to benefit.

The Statutory Direction

  • confirms that the scheme is not limited to employees who would otherwise be redundant. Rather, it applies to anyone furloughed “by reason of circumstances arising as a result of coronavirus or coronavirus disease”. Previous versions of the guidance had indicated that, in certain circumstances, individuals could only be furloughed if their role was redundant;
  • clarifies that there needs to be a written agreement between employer and employee (it says email is okay). In contrast, the guidance we’ve had to rely on until now says that “Employers should discuss with their staff and make any changes to the employment contract by agreement.” Employers who have already furloughed staff with no written agreement in place might therefore not be eligible under the scheme. It’s important to retain your records for at least five years so that you can evidence the agreement you reached; and
  • continues to provide for the furloughing of shielded staff and carers.

What we still don’t know

Neither the updated guidance nor the statutory direction

  • tell us how furlough interacts with holiday, despite the fact that this topic has been the subject of confusion and speculation ever since the first version of the scheme guidance was published; or
  • provide any information about the application of the scheme to the public sector or to organisations that are wholly or partly funded by public money. Version four of the guidance retains the same wording on this as its predecessor, which includes the phrase “In a small number of cases, for example where organisations are not primarily funded by the government and whose staff cannot be redeployed to assist with the coronavirus response, the scheme may be appropriate for some staff.” The Directions make no mention of the issue whatsoever.

The scheme is due to go live on Monday 20 April, so it seems unlikely that either the guidance or the legislation will now be amended.

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Please contact our team below if you have any questions regarding this or any other issue and keep abreast of all the latest Coronavirus law changes at our COVID-19 portal.