UK COVID-19: latest updates on CJRS

Minor changes to HMRC's Coronavirus Job Retention Scheme Guidance continue to be made.  The main changes made on 23 April are as follows:

• It has been clarified that employees who are made redundant or stop working after 19 March (and for whom an RTI payment submission has been made on or before that date) can be rehired and furloughed in the same way as those ceasing employment after 28 February (and for whom an RTI payment submission has been made on or before 28 February).  There is no requirement for the employee to be re-hired by any particular date, but the furlough can start no earlier than the date of rehire.  This includes fixed term employees who stop working due to their contract expiring.
• Employees who start and finish work between 28 February and 19 March 2020, whether on fixed term contracts or otherwise, are not covered by the CJRS.
• As previously discussed here, there is some discrepancy between the HMRC Guidance and the Treasury's Direction as to what written confirmation or agreement to furlough is needed for valid claims to be made under the CJRS.  The Guidance now provides that a collective agreement reached between an employer and a trade union is acceptable for the purpose of a claim.

The issue of agreement to furlough has also been the subject of published correspondence from HMRC on 23 April.  In response to a request for clarification on HMRC's interpretation of the requirement in the Schedule to the Treasury Direction (which sets out the legal framework for the CJRS), that the employer and employee have agreed in writing that the employee will cease all work, the correspondence states that:

• HMRC will act at all times in accordance with the Direction
• its interpretation of the Direction is as set out in the HMRC Guidance
• it expects employers to consider the Guidance in the first instance when seeking to understand the operation of the scheme and the HMRC's interpretation of the Direction
• it considers that the Guidance is consistent with the Direction - the Guidance currently provides: "To be eligible for the grant employers must confirm in writing to their employee confirming that they have been furloughed. If this is done in a way that is consistent with employment law, that consent is valid for the purposes of claiming through the scheme. ... There needs to be a written record, but the employee does not have to provide a written response. A record of this communication must be kept for five years."
• "put simply", this means that the employer and the employee must reach an agreement and an auditable written record of this agreement must be retained. "It does not necessarily follow that the employee will have provided written confirmation that such an agreement was reached in all
  cases."

This suggests that an employer should have obtained agreement by the employee to be furloughed but this may not need to be confirmed by the employee in writing; a written record made by the employer that there has been oral agreement with the employee (or perhaps implied agreement in some cases) may suffice.  We discuss this further in our updated client briefing on the CJRS, available here.

Given the uncertainty, there remains a risk of the HMRC requiring repayment of grants made for employees where written furlough agreements have not been obtained. Commentators have suggested that employers may have a credible judicial review claim against the Treasury and/or HMRC on the basis that they should be entitled to rely on the earlier versions of the Guidance, at least in relation to those already put on furlough and up to the point of the Schedule being released. It would, however, seem prudent now to put in place furlough agreements as soon as reasonably practicable given the revised Guidance.

Other recent developments include:

• new regulations were made on 24 April 2020 providing that, for furloughed workers starting family-related leave on or after 25 April 2020, their statutory family-related leave pay rate will be based on their usual earnings rather than the furloughed pay rate.  HMRC's Guidance now notes that the statutory pay entitlement may need to be calculated differently for these furloughed employees and refers employers to updated guidance on SMP here.
• on 28 April the Government launched a new online learning platform, the Skills Toolkit, providing free digital and numeracy courses aimed at furloughed staff.