Furlough – latest updates to the Coronavirus Job Retention Scheme

The Government has updated its guidance on the Coronavirus Job Retention Scheme (CJRS). The updates are fairly specific, as opposed to the more wide-ranging changes we have sometimes seen over the past few weeks – which is a bit of a relief!

Employees acting as a representative whilst on furlough

The most significant change in our view is that the guidance now specifically states the following:

“Whilst on furlough, employees who are union or non-union representatives may undertake duties and activities for the purpose of individual or collective representation of employees or other workers. However in doing this, they must not provide services to or generate revenue for, or on behalf of your organisation or a linked or associated organisation.”

The main situations that we feel this clarification is likely to be relevant to are:

1. Acting as an employee or union representative in relation to collective consultation for TUPE or collective redundancy purposes

2. Acting as a companion in accordance with the statutory right to be accompanied (e.g. to disciplinary and grievance hearings)

3. Acting as an employee representative on an employee forum or information and consultation body

Point number 1 in particular will come as a big relief to employers who are planning significant redundancy exercises over the next few months (see our previous article Can you make employees redundant during furlough and if so, how?). If the employer is ‘proposing to dismiss as redundant’ 20 or more employees within a 90 day period, then statutory consultation with representatives is required – if there is a union recognised then the consultation will be with the union, but if not, then it will be with elected employee representatives.

Although the change to the guidance has presumably been made to ensure that employers aren’t prevented from engaging in consultation during furlough, in normal circumstances those who act as employee representatives would be given paid time off from their normal duties for any time they spend acting as a representative. Clearly if this happens while they are on furlough, their time off is limited to what they are being paid under the CJRS (80% of pay or £2,500, whichever is the lower).

Now that it has been specifically confirmed that acting as a representative  in a collective redundancy situation doesn’t involve a breach of the CJRS, this also appears to confirm that (as we had already anticipated) attending individual consultation regarding redundancies won’t fall foul of it either.

In terms of acting as a companion for disciplinary and grievance hearings, it is useful to have the position on this made clear. We wrote about some of the current difficulties in conducting disciplinary processes in our recent article How do you conduct disciplinary hearings remotely? 

Furloughing company directors

The other main clarification to the scheme was to deal with company directors (usually in smaller companies) who have an annual pay period, i.e. they pay themselves once a year. There had been some doubt as to whether they could claim under the CJRS and if so, how their furlough pay should be calculated. The guidance now confirms that they are eligible to be furloughed (subject to the rules regarding what they can and cannot do whilst on furlough – see our article on this here).

Employees returning from family friendly leave

The CJRS guidance also clarifies the position for people who have been on family friendly leave (maternity, paternity, adoption, shared parental, parental bereavement etc) before they were furloughed. Essentially their pay whilst on furlough should be calculated based on their normal wage, not what they received while they were on family friendly leave.

The guidance for employees states:

“If you’re on fixed pay and are a full or part time employee who has been furloughed on return from family related statutory leave, your employer should calculate the grant against your salary, before tax, not the pay you received whilst on family related statutory leave.

If your pay varies and you are furloughed on your return from statutory leave, your employer should calculate the grant using the highest of either:

• 80% of the same month’s wages from the previous year (up to a maximum of £2,500 a month)
• 80% of the average monthly wages for the 2019 – 2020 tax year (up to a maximum of £2,500 a month)”