HM Insights

Coronavirus Job Retention Scheme now live

Correct as of 20th April 2020

Just one month after it was announced by the Chancellor the Coronavirus Job Retention Scheme is now live and operational. We have provided updates when the scheme was first announced, when further guidance was issued on 26 March 2020, on 6 April 2020, on 8 April 2020 as further details were announced, on 9 April 2020 and finally on 15 April 2020 as the scheme expanded in scope.

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Early news reports have suggested that the scheme is working as planned and so far there haven't been any technical issues with employers accessing the scheme.

Employer's accessing the scheme are being encouraged by HMRC to use two new resources prior to submitting their online application. Firstly the HMRC Calculator which will calculate what you can claim for each employee and secondly their new step by step guide

Holiday pay

Further to the scheme going live over the weekend the Government updated guidance in relation to holidays which was the one big unanswered question prior to the launch of the scheme.

The guidance states that whilst furloughed employees will continue to accrue leave as per their employment contract. Employees can agree with employers to vary holiday pay entitlement as part of the furlough agreement, however almost all workers are entitled to 5.6 weeks of statutory paid annual leave each year which they cannot go below. This suggests that employees could agree to waive their entitlement to any period of contractual holiday entitlement accrued whilst on furlough, however as many employees have already been put on furlough it remains to be seen if any would agree to this retrospective change.

Employees can take holiday whilst on furlough. Working Time Regulations (WTR) require holiday pay to be paid at an employee's normal rate of pay or, where their rate of pay varies, calculated on the basis of the average pay they received in the previous 52 working weeks. Therefore, if an employee takes holiday whilst on furlough, employers should pay an employee's usual holiday pay in accordance with the WTR. Employers will be obliged to pay the additional amounts over the grant, though will have the flexibility to restrict when leave can be taken if there is a business need. This applies for both the furlough period and the recovery period.

If an employee usually works bank holidays then employers can agree that this is included in the grant payment. If employees usually take the bank holiday as leave then employers would either have to top up pay to their usual holiday pay, or give them a day of holiday in lieu.

Ominously the guidance confirms that during this unprecedented time, the Government are keeping the policy on holiday pay during furlough under review. So it is possible that the Government may yet change the position in relation to holiday pay on furlough, it was notable that holiday pay was not mentioned in the legislation last week giving the Government additional time to resolve how best to legislate on the issue.

Get in touch

If you've any queries about this, or any other employment related matter that could affect your business, our team of specialist employment lawyers can assist. Please contact us on 0131 247 2534 to discuss further.

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