Employment Alert – Updated Treasury Direction on the extended Furlough Scheme

16 Nov 2020

Updated Treasury Direction on the extended Furlough Scheme

 

What’s happening?

The government has issued a new Treasury Direction (The Coronavirus Act 2020 Functions of her Majesty’s Revenue and Customs (Coronavirus Job Retention Scheme) Direction) relating to the extended furlough scheme from 1 November 2020.
This gives the extended scheme its legal effect. The previous directions will continue to apply, but they will be modified and updated by this new direction.

Why is this important?

The new direction sets out the detailed rules of the extended furlough scheme for the period from 1 November 2020 until 31 January 2021. Although the furlough scheme will continue after 31 January 2021 (until 31 March 2021), there will be a new direction covering the scheme for that period.

Employers will be required to comply with the direction if they are furloughing any of their employees from 1 November 2020.

The direction formalises the existing government guidance (see our previous Alert here) and includes the following key points:

  • From 1 December 2020 until 31 January 2021, employers cannot make a claim for any day during an employee’s notice period. This isn’t limited to notice for redundancy, and so would include notice for any termination, including resignation. Employers should make note of this as we’re seeing a large number of queries about the possibility of extending notice periods while employees are serving notice
  • HMRC “must” publish information about an employer who receives a payment during December 2020 or January 2021 (other than in some very exceptional cases). This will include the name of the employer as well as a reasonable indication of the amount claimed by the employer
  • It is already well established that employers need to agree the furlough agreement with their staff. However, the new direction specifies that the agreement must be made before the beginning of the claim to which it relates (although it can be subsequently varied)

What should you do?

  1. Check and confirm that you are complying with the requirements of this new Treasury Direction for any employees that you wish to furlough in the period from 1 November 2020 to 31 January 2021
  2. Enter into a furlough agreement with employees in advance of the relevant claim period; document and keep records of this
  3. Ensure that – from 1 December 2020 – you do not claim for any day that an employee is serving notice

If you need more information please contact us on 0800 2800 421 or email Employment.Alert@trethowans.com to find out how we can help.

 

Author

Kira McKane

Solicitor