Flexible Furlough – New Treasury Direction issued
On 25 June 2020, the government issued a third Treasury Direction relating to flexible furlough which modifies the effect of its two previous Treasury Directions.
The new Direction sets out the rules that will apply from 1 July 2020 under the amended Coronavirus Job Retention Scheme (“CJRS”) which allows for flexible furlough arrangements (see here for our previous update on this).
What does the new Direction cover?
The new Direction is lengthy and complex. However, we have briefly summarised the key points below:
1. An employer will only be able to participate in the CJRS that applies from 1 July 2020 if it has made a claim under the original scheme by 31 July 2020 in respect of an employee who has been furloughed for a minimum period of three weeks beginning on or before 10 June 2020.
2. Returners from family leave and armed forces reservists are excepted from the 10 June 2020 cut-off date.
3. The employer and employee must reach an agreement (which can include a collective agreement) on flexible furlough arrangements. That agreement should:
– Specify the main terms and conditions of the arrangement;
– Be incorporated (expressly or impliedly) into the employee’s employment contract;
– Be made or confirmed in writing (which may be in electronic form); and
– Be retained by the employer until at least 30 June 2025.
4. The new Direction sets out in detail how amounts that can be claimed under the CJRS in respect of an employee who works part-time on flexible furlough should be calculated.Back to Our Thinking →