On 26 June, the Treasury released a new Direction on the Coronavirus Job Retention Scheme (CJRS). This sets out the previously announced modifications to the CJRS extending the scheme until the end of October 2020 and allowing for furloughed employees to be brought back part-time under a ‘flexible furloughing’ arrangement.

The Direction is split into two parts: Part 1 deals with the rules applying from March to June whilst Part 2 sets out the new rules that apply from 1 July until the scheme ends on 31 October. It confirms:

  • The cut off date for claims relating to the period up to 30 June 2020 is 31 July 2020.
  • From 1 July employees can only be furloughed if they have already completed a 3 week period of furlough. This means it will not now be possible to furlough any employees who had not commenced their first period of furlough by 10 June 2020. The exceptions to this are employees returning from family leave (such as maternity leave) or armed forces reservists returning from deployment.
  • As with the original scheme, consent is needed for an employee to be flexibly furloughed. Any agreement to be flexibly furloughed must be made in writing or confirmed in writing, and that this can be done electronically (including by email). A copy this agreement must be kept until at least 30 June 2025.
  • Claim periods can no longer overlap calendar months. Claims must also be for a minimum of 7 consecutive calendar days except when dealing with days which fall at the beginning or end of the month (known as “orphan” periods).
  • The maximum number of employees that can be claimed for in any one claim period cannot exceed the maximum number that were claimed for under any previous claim submitted under the pre-July rules (the “high water-mark number”). There are some exceptions to this, including those returning from family leave, army reservists and those who have transferred to the company after 10 June 2020 by way of TUPE.
  • The amounts claimable under the CJRS will stay the same in July but gradually taper off from August to October. From an employee’s perspective, they remain entitled to receive the lesser of 80% salary or £2,500 (or such pro rata amount to account for hours when they work if they have returned part time) but what the employer can claim will change as set out in the table below:

July

August

September

October

Government contribution: employer NICs and pension contributions

Yes

No

No

No

Government contribution: wages

80% up to £2,500

80% up to £2,500

70% up to £2,187.50

60% up to £1,875

Employer contribution: employer NICs and pension contributions

No

Yes

Yes

Yes

Employer contribution: wages

-

-

10% up to £312.50

20% up to £625

Employee receives

80% up to £2,500 per month

80% up to £2,500 per month

80% up to £2,500 per month

80% up to £2,500 per month

The previous iteration of the furlough scheme was criticised for being too rigid (for example in the requirement that the employee could not do any work at all for the employer whilst furloughed) so the flexibility introduced by these changes is clearly welcome. However, what the Direction demonstrates is the degree of complexity that comes with this flexibility: a substantial proportion of the document being taken up with various formula for calculating furlough pay for flexibly furloughed employees. Employers should therefore take care to follow the methodology for calculating claims, keep a clear record of the calculations used and seek advice in more complex cases.