News & Events

furlough

Notice Pay when on Furlough

What notice pay should employers pay to employees on furlough if the employee has agreed to accept 80% of pay during furlough? Daniel Barnett clarifies. Salary payments made by the employer during furlough can still be reclaimed from HMRC (subject to the limits of the Coronavirus Job Retention Scheme), despite the employee working out notice. An unresolved issue is: if employees have agreed to accept 80% of their salary while on furlough, is their notice pay also paid at 80%, or does it revert by operation of law to 100%? Remarkably little has been written on this, in part because such a simple question entails an extremely complex analysis, and in part because even with that analysis, the answer remains…

Covid-19, Legal Blog & Publications, Employment during Covid-19 4 May, 2020

HMRC responds to Daniel Barnett’s questions on CJRS loophole

Further to Daniel Barnett’s recent article highlighting a potential problem with the Coronavirus Job Retention Scheme, HMRC has responded directly with some answers. Daniel Barnett recently wrote an article highlighting a problem with the Coronavirus Job Retention Scheme (see here). He also highlighted this directly to HMRC. HMRC has written to Daniel, providing clarity for employers and employees on one of the seemingly inconsistent aspects of the Coronavirus Job Retention Scheme. Paragraph 6.7 of The Treasury’s Direction to HMRC, which is the legislative source of HMRC’s power to make payments under the CJRS, states that an employer can only reclaim the employee’s salary, amongst other things, “…if the employer and employee have agreed in writing (which may be in an electronic form such…

Covid-19, Employment during Covid-19, News 23 Apr, 2020

A problem with the Coronavirus Job Retention Scheme

There is a problem with the numerous iterations of the Coronavirus Job Retention Scheme. You now need to get the employee to agree in writing that they will not work. Daniel Barnett looks at the implications for employers who have already started the scheme. On 20 March 2020, the Chancellor Rishi Sunak MP announced as part of “an unprecedented package of measures” that businesses and their employees would be assisted by the Job Retention Scheme (the Scheme), thus bringing the word “furlough” into common usage. The Scheme allows for a grant covering 80% of an employee’s usual monthly wage up to £2,500 per month plus Employer National Insurance contributions and pension contributions up to the level of the minimum automatic enrolment…

Covid-19, Employment during Covid-19, News 17 Apr, 2020

High Court provides guidance on furlough and insolvency

A High Court judgment has provided important guidance on the provisions for furloughing employees where a company has gone into administration due to COVID-19. Peter Linstead explains how it is no less relevant despite the new Treasury Direction on furlough leave. On Easter Monday 13th April, a High Court judgment gave declaratory guidance on how the provisions for furloughing employees should be applied by administrators where a company had gone into administration as a result of the effects of coronavirus.  The judgment succeeds in providing essential clarity on the status of employees’ claims in an insolvency situation and has wider application to contractual variations in the context of furlough. It remains relevant in both these areas despite the publication on 15 April of…

Covid-19, Employment during Covid-19, News 15 Apr, 2020

Furlough and Annual Leave – Are We Clear?

With many businesses struggling during the ‘lockdown’, furlough is now a common term in employment law. Daniel Barnett looks at how this works alongside other forms of leave. The Government’s guidance on whether employees can take annual leave while on furlough under the Coronavirus Job Retention Scheme (‘CJRS’) is incomplete.  Employment Barrister Daniel Barnett gives his interpretation of the current situation while we await clarification. The following article deals with a wholly unclear area of law.  Daniel answers some frequently asked questions with his views at the time of publication (3rd April 2020) and specific advice should be sought on this fast moving area of law. Can an employee be on furlough and annual leave at the same time? At…

Covid-19, Employment during Covid-19, News 4 Apr, 2020

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