Extension of the Coronavirus Job Retention Scheme

The Chancellor announced yesterday that the Coronavirus Job Retention Scheme (“CJRS”) will be extended until 31 March 2021.

Full guidance is due to be published on 10 November 2020. However, HMRC published a Policy Paper on 5 November which applies for CJRS claims for the period starting on or after 1 November 2020 to 31 January 2021. Some of the key points are:

• For claim periods running to January 2021, employees will receive 80% of their usual salary for hours not worked, up to a maximum of £2,500 per month. The £2,500 cap is proportional to the hours not worked. This is more generous than the scheme which operated until the end of October 2020.
• The government will review the policy in January to decide whether economic circumstances are improving enough to ask employers to contribute more.
• Employers can claim even if they or the relevant employees, had not previously used the CJRS.
• “Flexible furlough” will continue, meaning that employees can continue to do some work.
• Employees can be furloughed if they are shielding in line with public health guidance (or need to stay at home with someone who is shielding).
• Employees that were employed and on the payroll on 23 September 2020 who were made redundant or stopped working for their employer after that date can be re-employed and claimed for.
• Where consistent with employment law, any flexible furlough or furlough agreement made retrospectively that has effect from 1 November 2020 will be valid for the purposes of a CJRS claim. Only retrospective agreements put in place up to and including the 13 November 2020 may be relied on for the purposes of a CJRS claim.

The Job Support Scheme has been put on hold. The Job Retention Bonus will also not now be paid in February 2021, its policy intent having fallen away. However, a retention incentive will be deployed at the appropriate time.

The extension of the CJRS will be welcome for many businesses and organisations, particularly in view of the further national lockdown restrictions in place until 2 December 2020 and the impact this will have on sectors forced to close their business. However, the changes may be too late for those organisations who have already made people redundant in anticipation of the scheme coming to an end, although the ability to re-employ staff who were made redundant or terminated their employment since 23 September 2020 but were on the payroll at that date, will help to mitigate some of the effect of that. Employers who are currently undergoing redundancy processes may now wish to consider whether those employees at risk of redundancy could instead be furloughed, even if the employer and employees have not used the CJRS before.

If you would like advice or assistance in relation to the CJRS, redundancy processes or any other workforce issues related to Covid-19, please get in touch with a member of our employment team.