Coronavirus Job Retention Scheme: contractual notice issue clarified in further guidance update

Coronavirus Job Retention Scheme: contractual notice issue clarified in further guidance update

Employment analysis: HMRC has clarified that a Coronavirus Job Retention Scheme (CJRS) grant in respect of a given employee may be used to pay the whole of his or her statutory or contractual notice period (whichever is the longer) in circumstances where the contract of the furloughed employee is terminated on notice, in further updates to two guidance documents relating to the CJRS.

HMRC guidance: Check which employees you can put on furlough to use the Coronavirus Job Retention Scheme (updated 17 July 2020)

HMRC guidance: Check if your employer can use the Coronavirus Job Retention Scheme (updated 17 July 2020)

HMRC has, on 17 July, made a further change to two of its guidance documents on the CJRS, namely Check which employees you can put on furlough to use the Coronavirus Job Retention Scheme and Check if your employer can use the Coronavirus Job Retention Scheme.

In Check which employees you can put on furlough to use the Coronavirus Job Retention Scheme, although the changes made include a couple of other inconsequential amendments, there is only one change of significance, namely the addition of the words ‘or contractual’ to the following sentence:

‘You can continue to claim for a furloughed employee who is serving a statutory or contractual notice period, however grants cannot be used to substitute redundancy payments.’

A similar amendment has been made, in like terms, to the document Check if your employer can use the Coronavirus Job Retention Scheme. At the time of writing, the document Check if you can claim for your employees’ wages through the Coronavirus Job Retention Scheme has not yet been amended in the same fashion; we would, however, expect that this will occur shortly to bring that document in line with the other two.

Previously, changes had been made (on 10 July) to the guidance documents Check if you can claim for your employees’ wages through the Coronavirus Job Retention Scheme and Check if your employer can use the Coronavirus Job Retention Scheme (see News analysis: Further updates made on 10 July to HMRC guidance on Coronavirus Job Retention Scheme) whereby:

• clarification was added to declare that a CJRS grant may be used to pay an employee during their statutory notice period, but

• it remained uncertain (because the guidance was silent on the point) as to whether a CJRS grant may be used to pay an employee during the whole of their contractual notice period (as opposed to just the portion of that that is the statutory minimum)

This latter point is significant as contractual notice periods may be considerably longer in some cases than the required statutory minimum.

This latest amendment has cleared up the remaining doubt: it is now clear that a CJRS grant in respect of a given employee may be used to pay the whole of his or her statutory or contractual notice period (whichever is the longer) in circumstances where the contract of the furloughed employee is terminated on notice.

It was already clear prior to that time from the guidance text that a CJRS grant cannot be used to pay a statutory redundancy payment (the employer itself must pay that).

For information on the revised CJRS generally, see Practice Note: Coronavirus Job Retention Scheme (revised version from 1 July 2020).

Tracked versions

Two track changes documents in PDF format, illustrating the additions, moves and deletions that have occurred in the HMRC guidance documents can be accessed here:

HMRC check which employees you can put on furlough guidance on the CJRS: track changes comparison between 10 July and 17 July versions

HMRC employee guidance on the CJRS: track changes comparison between 10 July and 17 July versions

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