Employees on parental leave who are set to return to work in the next few months will still be able to be placed on furlough despite the scheme closing from today (10/06/20) for new applicants.
Rishi Sunak, Chancellor of the Exchequer made this amendment to the Coronavirus Job Retention Scheme (CJRS) yesterday (09/06/20), allowing parents the opportunity to be furloughed after returning from parental leave.
Today is the last day you can officially furlough an employee on the Government’s CJRS. Applications can be made to the scheme until the 30/06/20. The 10/06/20 is the last official day a worker can be furloughed, in order to comply with the full three-week period that is required. In order to be furloughed both employer and employee must agree to it.
Maternity Action, a UK charity committed to ending inequality and improving the health and wellbeing of pregnant women wrote to the chancellor earlier this month asking him to exempt those on parental leave from the deadline furlough date of the 10/06/20.
However, this amendment will only be viable for companies who have already furloughed other staff.
Mr Sunak said:
When I announced these changes to the furlough scheme last month, I was clear that we wanted to do this in a fair way, that supports people back to work as the country begins to re-open following coronavirus.
But for parents returning from leave, their circumstances have meant that they are still in need of support, and I’m pleased that they will be able to receive the financial assistance they and their family will need.
David Browne, employment partner at the law firm, Shakespeare Martineau, said:
Clarifying the situation for those employees returning from parental leave solves one of the remaining complexities of the furlough scheme. Throughout the process there have been lots of points where the law has been ambiguous, creating challenges for employers and their advisers alike. However, now the scheme is drawing to an end and the Government has made it clear how the coming months will play out.
Employers must now take all of this information on board and make careful decisions about their future workforce structure. Ultimately, they must do what is going to keep the business operationally feasible and this may include continuing to use the furlough scheme until it ends in the Autumn.
Many employers will also be faced with tough decisions when considering life after furlough and redundancies may need to be made. It’s important to remember that individuals whose jobs are at risk and who have not been furloughed may have the basis to make a claim for unfair dismissal, as every avenue hadn’t been explored to help prevent the redundancy. As such, employers should be expected to demonstrate why furlough was not considered as a viable option for some employees subsequently made redundant.
Above all, employers should keep in mind that employees will remember how they’ve been treated through the pandemic. Businesses that get it right will benefit from goodwill and positive feeling, whereas those that treat employees poorly at this time may find themselves dealing with a bad legacy, which is hard to reverse.
Last month, Mr Sunak announced that employers will start having to pay towards the cost of the CJRS, from September companies must pay 10 per cent and then 20 per cent in October of the 80 per cent of wages the furlough scheme entitles to employees.
The amendments to the scheme outline that employers will also pay National Insurance Contributions (NICs) and pension contributions from August onwards. Workers will be allowed to work part-time whilst on furlough from 1st July instead of 1st August which was previously announced. Employers have to pay the full amount of salary for the time worked where the CJRS will cover 80 per cent of the remaining days that did not see the employee at work.
Ideally, by November the scheme will come to a close.