Coronavirus Job Retention Scheme – Furloughing Employees

Since the announcement of the Coronavirus Job retention Scheme, there has been a lot of media coverage about how this will apply.

https://jsca.co.uk/coronavirus-job-retention-scheme-update/

Public sector organisations

The government expects that the scheme will not be used by many public sector organisations, as the majority of public sector employees are continuing to provide essential public services or contributing to the response to the Coronavirus outbreak.

Where employers receive public funding for staff costs, and that funding is continuing, they expect employers to use that money to continue to pay staff in the usual fashion and correspondingly not furlough them. This also applies to non-public sector employers who receive public funding for staff costs.

Organisations who are receiving public funding specifically to provide services necessary to respond to COVID-19 are not expected to furlough staff.

In a small number of cases, for example where organisations are not primarily funded by the government and whose staff cannot be redeployed to assist with the coronavirus response, the scheme may be appropriate for some staff.

Furloughed directors

This continues to be a grey area despite the infamous Martyn Lewis tweet that directors could furlough themselves.

There is no doubt that directors can be furloughed and that during the furlough period they can carry on discharging their statutory duties as directors – such as ensuring that accounts and other legal forms are submitted to Companies house.

What is not clear though is which other duties furloughed directors can undertake.  In our opinion the Government could have clarified this when they issued a statement on directors’ responsibilities statement but, unfortunately, they did not.

So, does organising or completing the company payroll, dealing with suppliers and queries from customers/clients count as carrying on with normal work? The Coronavirus Job Retention Scheme claim form has not yet been published so we cannot see the detailed terms and conditions for making the claim.  In our opinion, we think it would be hard to argue that these sorts of tasks do not count as work for the company.

Can a furloughed employee carry out a second job?

When the scheme was first announced the guidance was that yes, this was possible as long as the contract of employment allows an employee to work elsewhere.

However, employment law solicitors are advising that if the second job is, say a night time or weekend job, then this is fine but if the employee works in a “9 – 5” job that they are furloughed from then they cannot simply move to another “9 – 5” job.

The information in this blog provides only an overview of HMRC guidance and legislation in force at the date of publication and no action should be taken without consulting the detailed HMRC guidance and legislation or seeking professional advice.  Therefore no responsibility for loss occasioned by any person acting or refraining from action as a result of the material contained in this blog can be accepted by the firm.

Photo by Martin Sanchez on Unsplash