Coronavirus Job Retention Scheme (CJRS)
The Third Treasury Direction came into effect on 1 July 2020, when flexible furlough was introduced. The key points arising out of the flexible furlough arrangements were discussed in our June 2020 update, here. The following points have arisen since:
- It was previously unclear if employers were able to make employees redundant during a period of furlough (redundancy being contrary to the stated purpose of the CJRS - the ‘continued employment’ of employees). The guidance now puts this uncertainty to rest, and confirms that employees can be made redundant during a period of furlough.
- The guidance also confirms that employees can serve their statutory or contractual notice periods on furlough; and employers can claim for that notice period through the scheme. This only applies to notice periods that are worked out; payments in lieu of notice cannot be claimed for through the scheme.
- While it has been clear for some time now that furloughed employees (i) continue to accrue holidays while furloughed and (ii) can take holidays during a period of furlough, there was some confusion as to how holidays would operate alongside the new flexible furlough scheme. The guidance confirms that if employees are flexibly furloughed, any hours taken as holiday during the claim period should be claimed as furloughed rather than working hours (and can be claimed for). This does not however mean that employers can place an employee on furlough or move an employee back on to furlough only because they are on holiday where they would otherwise have been working. To do so would likely be considered an abuse of the scheme.