Flexible Furlough

From 1st July employers have the ‘maximum flexibility possible’ when it comes to Furlough and the HMRC last week issued the Treasury Direction around CJRS … ie the details.  

It's lengthy (at 35 pages) and my first thought was "You need to seek professional advice from your Accountant/Payroll Provider to do the calculations" ..... So for this article, I am concentrating on some of FAQ's that clients have been asking around Flexible Furlough and leaving the mathematics of the scheme to the relevant professionals!

1. Does an employer have to enter into a new Furlough Agreement if they are simply continuing to Furlough someone on a full-time basis?

No - you can continue to use the same written agreement you previously had, if you're continuing to keep them on 'permanent' Furlough (ie for the whole of their hours). 

2. Do I need a new written agreement every time I change someone’s hours of work?  

Helpfully, the direction does not state that employers need to do this!  My advice would be to ensure your written agreement includes the right to "adjust the hours at short notice" or "bring people back from furlough" and then keep very clear records of what hours were worked and what hours were furlough.  As always, the records are key and will need to be kept for at least 5 years.

3.  I've read that I can only change someone’s hours every 7 days. Is that true?

The 7 days in the direction refers to the calculation period for a claim. Subject to the written agreement and record keeping, you could have someone working on Monday; furloughed on Tuesday and so on and then change it all for Friday! 

You could agree that in advance but then call them back earlier if needed - so long as you give 'reasonable notice'.  As a guide - reasonable should be at least 24 hours.

4. Can I have someone working their same hours but on different days to the days they normally work?

Subject to their agreement - then yes, there's no reason why they couldn't.  This might be very helpful for staff who have child (or other ) care issues, where the days they normally work, might be days when they now have caring responsibilities.   

5. I have someone who is coming back from long term sick leave, can I now Furlough them?

The short answer is 'No'.  In order to be able to use Flexible Furlough, the individual had to have been furloughed at least once for 3 weeks by the 30th June.  There are some exceptions (maternity leave, adoption leave, shared parental leave, paternity leave, parental bereavement leave - and as of last week - armed forces reservist); but being on Long Term Sick is not one of the exception categories.

6. We were 'topping up' pay to 100% but now want to drop it back to the 80%.  Can we do that?

Hopefully your original written Furlough Agreement included something like 'we'll keep it under review'.  If it didn't, and you are intending to keep them on furlough for the 'whole' of their hours (ie not Flexible Furlough), then you should drop them a line advising that you are going to reduce their pay to Furlough Pay from (x) date.  (HR's Golden Rule - always put it in writing!)

If you are intending to move them to Flexible Furlough - then you'll need a new written agreement anyway.  So this time, make sure to include the payment levels!

7. Can you still have people on Furlough and Holidays?

Yes, there has been no change to that (subject of course to your topping up pay to 100% for the period of annual leave).  You can also require staff to take annual leave so long as you give double the amount of notice of the leave (so 2 weeks’ notice for 1 weeks leave).

But be aware that the updated directions note, “Employees should not be placed on furlough for a period simply because they are on holiday for that period.”

  8. Can you still have people on Furlough and working their redundancy notice?

Yes, there has been no change to that (subject of course to your topping up pay to 100% for the period of statutory or contractual notice). You might even consider extending the notice period if you can under Furlough.  But the redundancy payment itself cannot be claimed via the Furlough scheme.

Don’t forget to keep in touch with your employees on Furlough.  Some of them will have been away from work for over 100 days and will naturally be concerned about their long-term prospects. so do keep them informed about your plans.

As always: Don't forget that you can find out more information from our Coronavirus HR Hub via our webpage and contact us if you want to know how the guidance applies to your specific situation.