04/03/2021 – Furlough scheme to continue until end September
In yesterday’s budget the Chancellor announced the extension of the furlough scheme which will now continue in its current guise until the end of June, with employers making a contribution to furloughed wages in July, August and September.
Until July employers can continue to claim 80% of wages up to a cap of £2,500 per month and are only being responsible for the employer’s costs for National Insurance and minimum pension contributions.
In July employers will also have to pay 10% of the furlough wage costs, fully furloughed employees will continue to receive 80% of their normal wages to the cap of £2,500. In August and September employers will have to pay 20%.
Employees who have given or received notice of termination
Changes to the furlough scheme last year meant that employers were not able claim in respect of any days a furloughed employee spends on notice, we presume this condition will continue to apply under the extended scheme. This condition applies irrespective of whether the employer served notice (as will be the case with many current redundancy programmes underway), or whether the employee served notice themselves, perhaps to move to a new employer or to retire.
The rule also applies to statutory or contractual notice, and this is significant, since many employers wrongly assume that the wording in their employment contracts takes precedent. As a practical example a client recently contacted myHRdept believing that their legacy contract, which stated a month’s notice either way, would apply in the case of an employee with 11 years’ service. He was surprised to learn that in that case, the higher statutory notice of one week per year of service, up to a maximum of 12 weeks applied, and his employee was therefore entitled to 11 weeks’ notice (NB This applies to notice served by the employer – if the employee were to resign, the contractual notice of, in this case, one month would apply.)
