HM Treasury Direction on the Flexible Furlough Scheme
Since the “flexible furlough” scheme was first announced in May 2020 (see our latest article here), the Government has been issuing updates to clarify the rules of the new scheme. The latest such update was published earlier today, in the form of a Treasury Direction.
The latest Direction confirms that:
- Claims under the previous furlough scheme, which is due to end on 30 June, must be submitted by 31 July 2020.
- An employee will only qualify for a grant under the new flexible scheme if they:
i) have been on furlough for a minimum of three weeks, beginning on or before 10 June 2020 (but see the next bullet point below relating to family leave);
ii) are not working at all, or not working their usual hours of work;
iii) have been instructed not to work (or to work less than their usual hours) as a result of COVID-19; and
iv) have entered into an agreement with their employer, setting out the terms of the furlough leave.
- If an employee has been on family leave (such as maternity leave) which started before 10 June and is due to end after 10 June, then such an employee may still qualify for a grant under the new scheme. A similar rule applies to armed forces reservist employees.
- The furlough agreement between the employer and employee (referred to bullet (iv) above) must be in writing and specify that the employee will either do no work or will not work their usual hours. It must also set out the main terms and conditions of that arrangement.
- The agreement must be made before the beginning of the period to which the claim relates and be incorporated (whether expressly or impliedly) into the employee’s contract. The employer is required to retain a copy of the agreement until at least 30 June 2025.
- The Direction also sets out, in detail, how to calculate the amounts payable by the employer under the new scheme, and the amount of the grant.
If you require advice/support on any aspect of the above or on any other employment matter in the meantime, please do not hesitate to contact Jonathan Bruck.
This article is provided for general informational purposes only. Although every effort has been made to ensure that information in this article is accurate, it does not constitute legal advice and should not be relied on as such. In case you require any legal advice, please do not hesitate to contact us.