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Coronavirus: UK Job Retention Scheme – previously excluded employees now in scope to be furloughed

Summary

Key points arising out of the revised guidance and the legislative framework include:

1. Eligibility cut-off date extended from 28 February to 19 March: This is the most significant change to the UK Coronavirus Job Retention Scheme (CJRS) guidance. It brings into scope many new recruits who previously could not be furloughed. Earlier versions of the guidance said that new recruits who joined after 28 February were excluded from the scheme. However, the latest guidance now says that individuals put on the employer’s payroll on or before 19 March, and in respect of whom the employer has also made an RTI submission to HMRC on or before 19 March, can be furloughed.

It may well be that employers have already taken action to terminate new recruits who, according to previous versions of the guidance couldn’t be furloughed. Employers still have the option to rehire these individuals and then furlough them, if they wish to do so.

2. Requirement for employer/employee agreement: the legislative underpin for the CJRS (the ‘CJRS Direction’) has now also been published and says that to be furloughed, the employer and employee must agree in writing that the employee will cease all work. This conflicts with the guidance, where the employer only has to confirm in writing that the employee has been furloughed, not that the employee has agreed to cease working. The best evidence of employee agreement is express confirmation from the employee that they agree to the furlough letter terms (which include the

Coronavirus: UK Job Retention Scheme – government fills in some gaps in the guidance

Summary

As an update to our 27 March blog “Coronavirus: UK Job Retention Scheme – further government guidance”, the UK government has revised its online guidance to provide more information on how the Coronavirus Job Retention Scheme (CJRS) operates. A number of points have been clarified, whilst some important issues have still not been addressed.

The following CJRS points have been clarified:

Who can be furloughed?

Clarifications on who can be furloughed include:

  • Terminated and rehired staff: employees who were terminated on or after 28 February, whether or not for redundancy, can be furloughed, providing the employer rehires them. Previously the guidance only talked about those who were made redundant;
  • Carers/shielding employees: employees who are unable to work from home because they have caring responsibilities, or because they are shielding in line with public health guidance, are expressly covered;
  • Insolvency: employees of a company which is in administration may be furloughed, although the government expects administrators to only access the CJRS if there is a reasonable likelihood of rehiring them; and
  • Non-employees: whilst we already knew that non-employees such as agency workers who are paid through PAYE could be furloughed, the updated guidance highlights that company directors and salaried members of LLPs are also covered, as are apprentices.

What elements of staff remuneration can be reclaimed?

  • Fees, commission and bonuses: previously the guidance said these aspects of remuneration could not be part of the remuneration that could be reclaimed. However, the guidance now provides that

Coronavirus: UK Job Retention Scheme – further government guidance

Summary

As an update to our earlier blog “Coronavirus: UK Job Retention Scheme – what we know so far from the UK government’s 20 March 2020 announcement”, please see below for further details.

Analysis of updated government guidance in relation to the Coronavirus Job Retention Scheme (as at 27 March 2020) >

Coronavirus: UK Job Retention Scheme – what we know so far from the UK government’s 20 March 2020 announcement

Summary

As an update to our earlier blog “Coronavirus – UK job retention scheme”, we have analysed the Retention Scheme announced by the UK government on 20 March 2020, based on the information released so far.

 

Analysis of the Coronavirus Job Retention Scheme (as at 20 March 2020) >

Coronavirus – UK job retention scheme

As an update to our earlier blog “Coronavirus – update on UK government measures in relation to employee absences and statutory sick pay”, set out below is a brief overview of the key measures that have, today, been announced by the UK government in relation to employees.

  • Employers will be provided with a grant to cover 80% of the salary (up to £2,500 per month) of employees who are not able to work, so that they can be furloughed, rather than dismissed. Employers can choose to top this up if they wish.
  • These grants will be backdated to 1 March 2020 and will be available for at least 3 months.
  • There will be no limit on the amount of funding under the scheme and the first grants are expected to be paid within weeks.
  • Additional measures have also been announced, including the business interruption scheme being interest-free for 12 months rather than 6 months, and VAT payments being deferred to the next quarter.

Extension of UK Off-Payroll Working Rules (often referred to as “IR35”) delayed to April 2021

Summary

The extension of the UK off-payroll working rules to private sector clients, due to take effect from April 2020, has been delayed by one year. This follows growing calls from businesses and business leaders given the difficult and uncertain times faced by many in light of the coronavirus pandemic. This is a huge relief for many contractors and businesses but it is just a postponement. The extra time should be used wisely to prepare for the changes; given the year-long extension it is unlikely that HMRC’s promise not to be ‘heavy handed’ on penalties during the first year of IR35 will stand.

The delay may, however, put some in a difficult position. If, in anticipation of the new rules coming into force, it has already been determined by a private sector client that a relationship would be one of employer/employee if the intermediary was not involved, the intermediary (in most cases the contractor’s PSC) should seriously consider operating PAYE and account to HMRC for employer/employee NICs and employee income tax accordingly. HMRC previously stated that it will not carry out targeted campaigns into earlier tax years where a client determines that a worker would be an employee if engaged directly by the client. However, HMRC may see things differently if a determination has been made in relation to the current working arrangements, in anticipation of the new rules coming into force, and that determination is now ignored. Some contracts may also already have been re-negotiated on the basis of

COVID-19 / Coronavirus: HR frequently asked questions in multiple jurisdictions

Summary

We understand that our clients and contacts will be addressing complex COVID-19 related HR issues in multiple jurisdictions. BCLP, together with our local counsel friends, have produced a global Q&A document covering 35 jurisdictions.

Please download our global Q&A document here.

The document covers the following questions:

  • What if an employee refuses to attend work due to fear of the coronavirus?
  • What if an employee refuses to undertake work travel to an ‘at risk’ area?
  • Can an employee be stopped from holidaying to an ‘at risk’ area?
  • If an employee is off sick due to the coronavirus are they entitled to sick pay?
  • What should we do if someone suffering from the coronavirus comes into the workplace?
  • What if the workplace needs to be closed?
  • Can an employee be required by their employer to ‘self-isolate’?
  • What physical measures should employers be taking?
  • How should employers deal with discriminatory behaviours?

If you have any questions that we have not covered, please contact any member of the team and we could be happy to help.

IR35 – 5 key milestones to ensure you’re ready for the new UK regime

Summary

With the revised IR35 (off-payroll working) rules coming into force in the UK for private sector employers in just a few weeks, are you ready for the new regime? Here are 5 key actions to benchmark your readiness.

Are you definitely in scope for the new IR35 rules?

‘Small’ companies can continue to operate the existing IR35 regime (obligation to assess IR35 status and account for tax/NICs falls on the Personal Service Company (PSC)), rather than apply the new regime which puts the obligation on the fee payer/client.

‘Small’ companies are those that satisfy at least two of the following requirements:

  • annual turnover not more than £10.2 million;
  • balance sheet not more than £5.1 million; and
  • not more than 50 employees.

If you are a subsidiary within a group, your parent company must also satisfy the small company test for the exemption to apply.

Have you mapped all your Personal Service Company (PSC) relationships?

This includes identifying both direct engagements with PSCs as well as those provided through an agency.

Have you set up robust processes to make consistent employment status determinations and appropriately communicate them?

The client (the recipient of the consultancy services) must take reasonable care determining whether the consultant would have been an employee if they were engaged directly. HMRC expects you to make a correct and complete determination, and preserve sufficient records to show how the decision was reached. Blanket assessments of a PSC population as a whole are unlikely to be

Coronavirus – Top 5 HR tips for UK employers

Summary

The outbreak of the coronavirus has created real challenges for businesses. From a people perspective, employers need to bear in mind both employment law and health and safety obligations.

Our top 5 HR tips are:

  • Restrict non-essential travel to high risk areas – for example, many UK employers at present operate a very restrictive policy on travel to mainland China, and strongly discourage non-essential travel to Asia in general.
  • Quarantine staff who have returned from specified infected zones for a period – for example, require staff to work remotely from home for a 14 day period following their return. If the nature of their role means they are unable to work remotely, the general principle is that employees who are ready and willing to work are entitled to continue to be paid. Note however that an employer’s obligations in this regard depend on the actual contractual employment terms in place.
  • Deal appropriately and sensitively with staff who refuse to come to work for fear of infection – employers should listen to concerns staff may have and look to resolve genuine issues constructively. Ultimately, however, employers are entitled to discipline staff who refuse to obey a reasonable management instruction to come to work.
  • Minimise disease transmission within the office – remind staff to maintain hygiene standards, and consider installing hygiene facilities such as hand sanitisers at exit and entry points and enhancing existing office cleaning services.
  • Deal with discriminatory behaviours – monitor complaints or grievances which could indicate discriminatory behaviour towards employees of Asian origin.
  • For more information

    UK HR Two Minute Monthly: philosophical belief; equal pay; sexual harassment

    Summary

    Our February 2020 update outlines key UK employment law developments from January. It includes cases on ethical veganism as a philosophical belief, equal pay and the difficulties in defending such claims, the impact of the drafting of the employment contract on territorial scope, the EHRC’s technical guidance on sexual harassment in the workplace with practical steps employers can take to tackle harassment, and the FCA’s letter on non-financial misconduct for wholesale general insurance firms. We also outline other points of note, including the draft Parental Bereavement Leave Regulations 2020 and changes to the ICO guidance on the timescales for complying with a data subject access request.

    Ethical veganism held to be a philosophical belief

    An employment tribunal has found that a belief of ethical veganism is a protected philosophical belief under the Equality Act 2010. The Claimant, a qualified zoologist and vegan since 2000, had worked in animal protection most of his working life. He adhered to the philosophy of the Vegan Society and exhausted all reasonable steps to ascertain whether a product or service complied with ethical veganism.

    The tribunal noted that “ethical veganism” is not just about choices in diet, but also choices relating to what a person will wear, the personal care products they will use, their hobbies and their jobs. The tribunal also referred to the definition provided by the Vegan Society, “A philosophy and way of life which seeks to exclude, as far as possible and practical, all forms of exploitation and cruelty to

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