April 08, 2020

COVID-19: Additional clarification on UK Government updates to Furlough Guidance


It is an odd situation to be in, where details of a hugely significant grant scheme are contained in a handful of pages issued by Government and then supplemented by tweets and other less than usual sources. However that is where we are at currently.

First, there have been two tweets that have been widely circulated this week, which apparently are coming out of the COVID-19 helpline. The first was a tweet in response to a question from an MP about whether or not TUPE transfer after 28 February 2020 would render staff ineligible for the furlough scheme. The tweet from the COVID-19 helpline stated that it was possible to furlough staff who had transferred to the new employment after 28 February. This is a sensible clarification.

Secondly another widely retweeted response has confirmed that staff may take holiday and Bank Holidays. It asserts that staff should be paid their full pay. It does not say anything about requiring employees to take holiday whilst on furlough. The reference to full pay for staff taking holiday is slightly odd. Our view in our recent update on the UK Government furlough guidance was that an employer could pay the lower rate of pay, if the employer had made this clear in the letter agreed by the member of staff. It is unlikely to be HMRC’s position that an employer who failed to pay the correct holiday pay makes themselves ineligible for the grant. Provided they are paying the grant over in full to the employee, if an employer is not topping up holiday pay it is difficult to see the role HMRC has to play under the furlough scheme. And once again, it raises the question of what is “full pay”? If an employee is on a reduced rate permanently from going on furlough and that won’t change when the employee comes back from furlough, is that the full rate? If the employee is on a reduced rate which is temporary, but which may last beyond the end of furlough, is that the full rate until the rate is changed back to the original salary?

Finally there are reports online of evidence given to the Parliamentary Treasury Committee meeting on 8 April. Key points include that the portal is anticipated to be operational by 20 April with an aim that they will be able to make payments to employers by the end of April. Further guidance is coming out on how to present claims. The general guidance on what salary payments are to be paid is that compulsory ones are payable and discretionary ones are not. This last point is not entirely straightforward where workers may be entitled to allowances if they had worked a particular shift, but were under no obligation to accept the shift if offered to them.

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