How to Change Flexible Furlough Arrangements

How to Change Flexible Furlough Arrangements

Employers need to get a new agreement even they have already given written notice to their employee about furloughing.

Businesses that have been claiming for furloughed staff using the Coronavirus Job Retention Scheme (CJRS) gained an additional option of furloughing their staff for a portion of their workload not worked already from 1 July 2020. From 1 November, businesses can flexibly furlough their staff under the extended CJRS as well, regardless of whether they claimed CJRS grants for them before or not.

From 1 November, employers will have flexibility to ask their employees to work on a part-time basis and furlough them for the rest of their usual working hours or furlough them full-time. Employers can fully furlough employees (this means the employee does no work for the employer) or flexibly furlough employees (this means employees can work for any amount of time, and any work pattern and claim the grant for the furloughed hours, with reference to hours the employee would usually have worked in that period).

Employees can be furloughed where they are unable to work because they are shielding in line with public health guidance (or need to stay at home with someone who is shielding) or have caring responsibilities resulting from coronavirus, including employees that need to look after children.

As under the CJRS previously, during hours which employees are recorded as being on furlough, they cannot do any work for their employer that makes money or provides services for their employer or any organisation linked or associated with their employer. Employees nevertheless can take part in training, volunteer for another employer or organisation or work for another employer (if contractually allowed).

Even if employers have already given written notice to their employees about furloughing, they will need to get an agreement and provide written notice for the part time or shift-work pattern they’re claiming under the extended CJRS. Employers might need to do this more than once if they change the flexible furlough arrangement.

Employment contracts may need adjustments if they do not allow for part time or shift working. This might involve consulting with a trade union, or with the workforce. Employers should factor in time for this to take place before implementing flexible furloughing.

To be eligible for the grant, employers must have confirmed to their employee (or reached collective agreement with a trade union) in writing that they have been furloughed or flexibly furloughed.

Employers should discuss with their staff and make any changes to the employment contract by agreement. When employers are making decisions in relation to the CJRS process, including deciding who to offer furlough to, employment, equality and discrimination laws will apply in the usual way.

Employers must:

    • make sure that the agreement is consistent with employment, equality and discrimination laws
    • keep a written record of the agreement for 5 years
    • keep records of how many hours their employees work and the number of hours they are furloughed (for example, not working), for 6 years

The employee does not have to provide a written response and employers do not need to place all their employees on furlough.

The terms of any agreement must:

    • reflect the hours the employee has actually worked or not worked over the period of the agreement
    • allow the employer to satisfy the terms of CJRS so they can make a claim in relation to hours not worked

As a government policy paper on extended CJRS rules explains, 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 as long as it is made according to the conditions above. 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.

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Martina Weinberg is an MIB editor covering the issues of business leadership, business management, corporate governance and philanthropy.