UK Covid-19: recent developments on CJRS, SSP, and safe workplaces

CJRS developments

HMRC updated its guidance on the amended Coronavirus Job Retention Scheme on 1 July 2020.  Two changes to note are:

• Employees should not be placed on furlough for a period simply because they are on holiday for that period - an employer may not place an employee on furlough in order to fund (or part-fund) their holiday pay. However, if an employee is already flexibly-furloughed and then takes holiday, the holiday hours should be counted as ‘furloughed hours’ for the purpose of the claim under the revised CJRS.
• Employers can now use the online service to delete a claim within 72 hours of submitting it.

One issue which has received considerable media attention since the third Treasury Direction was published (setting out the framework for the revised CJRS in place from 1 July 2020) is whether employers can claim grants in respect of wages paid after notice of redundancy termination has been given to an employee.  Section 2.2 of the Schedule to the Direction (applicable to claims for periods both before and after 1 July 2020) now provides: "Integral to the purpose of CJRS is that the amounts paid to an employer pursuant to a CJRS claim are used by the employer to continue the employment of employees in respect of whom the CJRS claim is made whose employment activities have been adversely affected by the Coronavirus and Coronavirus disease or the measures taken to prevent or limit its further transmission.”  Previously the stated purpose was to provide grants to employers "in respect of them incurring costs of employment in respect of furloughed employees arising from the health, social and economic emergency in the United Kingdom resulting from coronavirus and coronavirus disease".

Measures taken to prevent or limit transmission presumably include the Government's shielding and social distancing guidelines and school/childcare closures, seemingly confirming that furlough can be used for clinically extremely vulnerable or vulnerable employees or parents unable to work from home. However, furlough of these and other employees is subject to the requirement that the employer use the grant "to continue the employment" of the relevant employees. This has been seized on by some commentators as suggesting that grants cannot be claimed if the employer would not otherwise have made the individual redundant, nor if the employer is intending to, or has given notice to, make the employee redundant at the end of their furlough, on the basis that the purpose requirement is to 'continue employment' more generally and at least beyond the furlough period. If the latter were correct, this would also seemingly exclude claims in respect of employees working out notice of termination for other reasons, including resignation.

One would have expected clearer drafting had this been the intention. Given that the Employee Guidance still refers to an employer being able to make an employee redundant while on furlough or afterwards, it seems more likely that the rationale for the new drafting was simply to make clear that fraudulent claims should not be made for employees who continue to work during furloughed hours, and that the money should only be claimed in order to keep on payroll employees who are not able to work their full hours for the duration of the furlough period. An employee's employment is "continuing" even while it is under notice of termination. HMRC has confirmed informally that grants can cover employees during their notice periods, and it is to be hoped that this will soon be included in the Guidance. Subject to further developments, this means that grants can be claimed in respect of employees under notice of redundancy but not for pay in lieu of notice (nor statutory redundancy payments – the Guidance already makes this clear). Where notice is given, the level of pay required during that notice period will depend on the terms of the furlough, the contractual notice period and whether the employee has normal working hours with fixed pay – legal advice should be sought.

The Chancellor's Economic Statement delivered on 8 July 2020 announced that the government will introduce a one-off payment of £1,000 to UK employers for every furloughed employee who remains continuously employed through to the end of January 2021. Employees must earn above the Lower Earnings Limit (£520 per month) on average between the end of the Coronavirus Job Retention Scheme and the end of January 2021. Payments will be made from February 2021. Further detail about the scheme will be announced by the end of July and full guidance published in the Autumn. There is no cap on this measure, which can potentially be applied to all 9 million employees currently on furlough.

Our updated client briefing on the CJRS in place from 1 July 2020 is available here.

Statutory sick pay

• HMRC has updated its guidance to reflect that statutory sick pay (SSP) paid due to coronavirus can  be claimed for employees who have transferred under TUPE. The usual conditions are that an employer had a PAYE scheme created on or before 28 February and fewer than 250 employees across all PAYE payroll schemes on that date. Transferees who do not meet these conditions can still claim SSP they have themselves paid to transferred employees if the previous employer did meet the conditions. The guidance also now states that an employee who is in a 14-day quarantine required on entering or returning to the UK, and is unable to work during this period, will not qualify for SSP unless they also meet one of the other conditions mentioned in the guidance.
• The Government has also confirmed that, from 10 July 2020, people arriving from selected destinations will be able to enter England without needing to self-isolate, unless they have been in or transited through non-exempt countries in the preceding 14 days. All passengers, except those on a small list of exemptions, will still be required to provide contact information on arrival in the UK. The government’s expectation is that a number of the exempted countries will also not require arrivals from the UK to self-isolate. The exempted countries and territories will be kept under constant review. The Foreign and Commonwealth Office has also updated its global advisory against ‘all but essential’ international travel to exempt certain destinations that no longer pose an unacceptably high risk of COVID-19, with effect from 4 July 2020.
• Regulations in force from 6 July now make clear that coronavirus-related SSP entitlement for clinically extremely vulnerable employees will end when the period specified in a shielding notification expires or if a notification expressly ends shielding (this is expected to apply from 31 July 2020), although eligibility will revive if further shielding notifications are made in future. In addition, the regulations provide for SSP to be available to individuals in self-isolation due to a member of their support bubble (ie, in a "linked household") developing symptoms, in the same way as where a member of their household develops symptoms, and that entitlement based on symptoms ends if and when the relevant individual tests negative for coronavirus.  Note however that the SSP regulations currently cross-refer to another regulatory provision for the definition of "linked household" when those other regulations were revoked in between the SSP regulations being made and brought into force. This is undoubtedly a mistake which hopefully will be rectified – the concept of support bubbles has been retained in guidance on lockdown restrictions in force from 4 July 2020 and hopefully HMRC will still accept SSP rebate claims on this basis. Such individuals may be covered by the test and trace system once the symptomatic person tests positive.

COVID-secure workplace guidance

The twelve work sector guidance documents were updated on 3 July.   Additional recommendations include:

• steps should be taken to avoid people needing to unduly raise their voices, such as avoiding playing music at a level that makes normal conversation difficult.
• records of staff contact details should be kept up to date, and employers should keep temporary records for 21 days of staff shift patterns and of contact details of customers and visitors attending a workplace (to help NHS Test and Trace with requests for that data if needed).
• guidance on outbreaks in the workplace: as part of the employer's risk assessment, the employer should have an up to date plan in case of an outbreak, nominating a single point of contact to lead on contacting local Public Health teams. A suspected outbreak should be reported if there is more than one case of COVID-19 associated with the workplace. If the local team declares an outbreak, the employer will be asked to record details of symptomatic staff and assist with identifying contacts. Information about the outbreak management process will be provided, covering control measures, staff communications and prevention messaging.

Guidance here temporarily stated that an employer's provision of testing kits or tests carried out by a third party were to be treated as taxable benefits in kind for the employee, but this plan appears to have been dropped as the text was removed 24 hours later.  The Chancellor subsequently confirmed in a response to the Treasury Select Committee that the government will introduce an exemption from income tax and NIC for coronavirus tests provided by employers to their employees.

An updated version of our return to work client briefing is available here.