Search

Last date to furlough employees for the first time

When the Chancellor announced the phase-out of the Coronavirus Job Retention Scheme (the furlough scheme) he confirmed that the new “flexible” furlough scheme will commence on 1 July. 

We are still awaiting full guidance on how this new scheme will operate, but as a result of the introduction of the new scheme, the Chancellor also confirmed that the existing furlough scheme will close to new entrants on 30 June.

In order to qualify under the flexible furlough scheme employees will have to have been furloughed for the minimum three weeks before 1 July.  In effect, this means that, for employees who have not previously been furloughed, the effective last date on which they can be furloughed is today – Wednesday 10 June.  It will not be possible to furlough additional employees who have not previously been furloughed after today.

One important exception which was announced overnight is that employees who have been away on extended maternity or paternity leave and return to work after 10 June will still be able to be furloughed under the flexible furlough scheme even though they will not have completed the minimum three week furlough period by 1 July.  This relaxation applies to people on adoption leave, shared parental leave, and parental bereavement leave.

WR comment – this is the first step in the gradual wind-down of the furlough scheme and is a critical date for employers to consider whether they need to furlough any employees who have not been furloughed.  This is a hard deadline so failing to meet it will mean the opportunity is gone.  

Frustratingly the guidance still remains ambiguous about the question of whether an employee will have to be on furlough on 30 June in order to qualify for the flexible furlough scheme.  The term “previously furloughed” could be taken to mean it is sufficient for an employee to have been furloughed for the minimum three weeks at some point but has since been brought back. However the stated intention of the flexible furlough scheme is to “allow furloughed employees to be brought back part-time” while the guidance issued overnight sates that in order to qualify for flexible furlough “people must be on the furlough scheme by 10 June.”  

Taken together these two statements would seem to imply that an employee must be on furlough on 30 June in order to come under the flexible scheme from 1 July.  This does seem to accord with the overall intention of flexible furlough but is by no means free from doubt. However to be entirely certain in our view the safest option is to work on the basis that in order to qualify for the flexible furlough scheme the employee must be on furlough, and must have completed a continuous period of at least three weeks’ furlough on 30 June.

The relaxation around parents returning from extended leave is a very welcome one and protects both employees and employers in that situation.  Given today’s deadline it seems likely this is the only relaxation to the hard deadline of 10 June that we will see.

10 June 2020 | Paul Brown, Tax Partner 

Share this news

News Categories

Request a call-back

I understand that the information that I have submitted will be held by Whittingham Riddell to enable us to fulfil your request. To understand how we use your data, please see our Privacy Policy
(If you're a human, don't change the following field)
Your first name.
(If you're a human, don't change the following field)
Your first name.