Flexible furlough scheme begins

Flexible furlough arrangements begin today (1 July 2020). The new arrangements apply to those who have previously been part of the furlough scheme prior to the deadline of 10 June. Additionally, parents who have returned from statutory parental leave after 10 June may participate in the scheme.

What is flexible furlough?

Flexible furlough is a new measure brought in by the Government to facilitate the return of employees to the workplace. It allows employers and employees to agree upon terms that suit themselves and their business model. This has the potential to be a very valuable tool when navigating the initial return to work process where operations may not be at full capacity – employers should be assessing prospective staff requirements now, if they have not already done so, as we are on the cusp of a more comprehensive return to work across all sectors.

What has changed?

The most obvious change is the removal of the previous minimum furlough period for employees, which meant that furlough agreements would have to be for a minimum of three weeks where no work was carried out on behalf of the employer. Practically, this means that employers will no longer have to worry that their employees are inaccessible for at least three weeks when put on furlough leave.

It is also now possible to recall employees and put them back on furlough at any time. The extent of the part-time work will be determined by an agreement in writing between the employer and employee on an individual basis.

However, there is a limit of four claims per month for furloughed employees through the Coronavirus Job Retention Scheme, which means that the minimum furlough period for employees should be at least one week. The only exception here is if there is a period where the work is less than a week and split between two months (at the end of one month running into the next), in which case two claims should be made in respect of the work undertaken in each month.

In order to assist in the new calculations for flexible furlough, HMRC have added worked examples to their website – this may help avoid any confusion with regards to how flexible furlough employees are remunerated and claimed for through the scheme.

There are also some additional record keeping requirements for flexible furlough staff – employers must retain records of the usual hours v actual hours worked by each employee for six years.

What about employees that were placed on furlough after 10 June but before the new scheme began today?

For those employees who are currently in their three-week minimum period from before the new arrangements began, they must be allowed to complete this three-week period before being moved onto the new scheme – this is on the basis that the original three-week agreement has already taken place between employer and employee.

It should also be noted that new agreements must be made for staff to participate in the flexible furlough scheme. These agreements must be in writing.

Are there limits to working patterns / how many staff can be furloughed?

Employers have full discretion to implement any working pattern they agree with the employee. This means that if an employer only requires an employee for three days a week, they can agree to furlough the employee for the remainder of that week and make a claim for the hours that would have been worked if the employee were working full-time.

However, you cannot furlough more employees than were furloughed under the original scheme. This may have an impact on the extent to which shift patterns/split rotas can be implemented if there is a low upper limit from the previous iteration of the scheme.

How are claims made under the new arrangements?

Claims can be made in the same way as in the previous scheme. However, from today, any claims through the scheme must be made in the same calendar month as the leave takes place. Claims from the previous version of the scheme (i.e. for employees before 30 June) must be made by the end of July or they cannot be claimed.

Is flexible furlough the only option moving forward?

Flexible furlough provides the most flexibility for employers, however the original scheme is still available until the end of October, when the entire scheme is scheduled to end.

How can we help?

If you have any questions about how flexible furlough may impact your business, or if you have any other employment law queries, please contact a member of our specialist Employment team.

This article was co-authored by Christopher Murphy.

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