English Lockdown – but new nationwide ‘Extended Furlough Scheme’ – what we know so far

Special thanks to Niamh Kelly at the HR Shropshire team for this article:
I appreciate that it is Sunday, however the unexpected introduction of another ‘lockdown’ across England from Thursday 5th November, coupled with the extension of the Furlough Scheme; has meant many clients are unsure of the next steps.

Helpfully, the Government has updated the latest guidance, but as always, some details are yet to be worked out. We also need to remember that the proposals are yet to be voted on in Parliament and there may inevitably be some changes, but in the meantime, here are the salient points.

1. Extended Furlough Scheme and the Job Support Scheme (JSS) – Open and Closed

What has CHANGED:
Both JSS schemes have been paused and will now launch when the new furloughextension ends

The Extended Furlough Scheme will go back to the August rates from the 1st November 2020 – i.e. the Government will pay 80% of wages for hours not worked up to a cap of £2500 and employers will pay NI and Pension contributions

Flexible Furlough will continue to be allowed

It will now include employees who were on the PAYE payroll by 23:59 on the 30th October 2020 (ie a Real Time Information (RTI) submission must have been made on or before the 30th October 2020)

Employers can still top up wages if they choose (and a reminder that if you are requiring staff to take annual leave – this must be topped up to 100% of normal pay)

What is still unclear:
How long the extended Furlough Scheme will continue for. The guidance states “until December” but we do not know whether that means to the 2nd December when the current lockdown is due to end.. or beyond.

Whether you will need to ‘agree’ any furlough arrangement with the employee and confirm that in writing (our view is that you should – see the examples below)

Whether any ‘new’ staff who are placed on Furlough for the first time under the Extended Furlough scheme, will be eligible for the Job Retention Bonus of £1k!

Redundancy: whether can you claim Extended Furlough for someone who is working their contractual or statutory notice (and of course a reminder that notice needs to be topped up to 100% of normal pay).

2. Some examples and FAQ’s!
a) We’ve already placed staff on the new Job Support Scheme (Open) from the 1st November You need to contact those staff as soon as possible to explain that the government has made a last minute decision to extend the furlough scheme and ask them to continue on furlough instead on their existing hours.

We believe that based on previous HMRC instructions (which of course is the formal information superseding any guidance!) that you will need to do a new Extended Furlough agreement with staff. In the meantime, our advice is to at least request they “reply via email to confirm their agreement to remain on Furlough until December”.

b) We have staff on Furlough but were intending to bring them back and not use the JSS (Open).

As with the example above, if your company falls into one of the areas that is required to close; you need to contact those staff as soon as possible to explain that the government has made a last minute decision to extend the furlough scheme and ask them to continue on furlough instead on their existing hours. 

c) Our staff are not on Furlough or JSS (Open), but we will have to reduce hours because of the new restrictions.

Lockdown does not come into effect until Thursday 5th December, so you should contact staff as soon as you can to advise that you intend to use the extended Furlough arrangements.

As with the response above, it is likely that you will need to do a new Extended Furlough agreement with staff so you should be seeking advice on what documentation you will need

d) We hired new staff after the previous Furlough scheme started so they were not eligible for Furlough before. Are they eligible now?

Yes – the Extended Furlough Scheme includes any member of staff who was on the payroll by the 30th October 2020.

e) We struggled to have staff work from home in the last lockdown and would prefer that they continue to attend for work (our workplace is COVID secure).

The new national restrictions for England are very clear – individuals cannot leave or be outside the house except for specific purposes including “for work purposes when your place of work remains open and where you cannot work from home”. (Similar restrictions have been in place in Wales for some time)

Although we are sure further guidance will be provided before the 5th November, our view is that if you had staff working from home during the last lockdown, it is going to be difficult to demonstrate that they could not work from home now.

f) We made staff redundant when the ‘old’ Furlough scheme was coming to an end – their last day was the 31st October!

g) We are about to start consultation with staff on redundancy/already in the process of consultation on redundancy…

The short answer is – we don’t know yet. 

You’ll recall that the purpose of the previous Furlough Scheme was to provide some short term relief for businesses. This scheme is a grant, not a loan.. but even so, there was recognition in the previous iterations of the guidance that when the scheme ended, employers would have to make a decision as to whether employees can return. Indeed, the “Employees” version of the guidance stated:

If your employer asks you to go on furlough and you refuse you may be at risk of redundancy or termination of employment, depending on the circumstances of your employer. However, this must be in line with normal redundancy rules and protections.

Assuming that the previous Furlough rules apply, then if the individual was still on the payroll by the 30th October 2020, you could temporarily rescind the redundancy notice for a month in order to avail of the new scheme.

Our advice is to get in touch with affected staff and advise them that you are awaiting clarification on the Governments last minute decision to extend the furlough scheme and you will be in touch with them as soon as you have clarification. We appreciate that this is not ideal, but in this case, until the HMRC information comes out, we don’t know!

Keep an eye on our Coronavirus Hub on the top of our webpages (The HR Dept Shropshire) for any updates and as always, please do contact us if you need any help or guidance.As soon as we have further information, we will update you!

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