CJRS Clarification on parents returning from maternity/paternity leave
The government has clarified that parents on statutory maternity and paternity leave who return to work in the coming months will be eligible for furlough scheme even after the 10 June cut-off date.
The Coronavirus Job Retention Scheme (CJRS), which was scheduled to be wound up at the end of July has been extended until October, with new flexibilities introduced from 1 July to support the economy by allowing furloughed employees to return to work part-time.
To enable the introduction of part-time furloughing, and support those already furloughed back to work, claims from July onwards will be restricted to employers currently using the scheme and previously furloughed employees. This means people must have been on the furlough scheme by 10 June.
However, the government confirmed last week that parents on statutory maternity and paternity leave who return to work in the coming months after a long period of absence will be permitted to be furloughed.
This will only apply where they work for an employer who has previously furloughed employees.
Our analysis of the new measure
The types of statutory leave that will qualify employees for furlough are: maternity leave, paternity leave, adoption leave, shared parental leave and parental bereavement leave.
According to the government’s announcement, furlough can be agreed with employees on those types of leave ‘who return to work in the coming months’ (presumably up to October 2020), provided that ‘they work for an employer who has previously furloughed employees’ So any employees, not just the returning parent would count, and presumably having furloughed one employee would suffice).
The announcement says that this applies to employees returning to work after ‘a long period of absence’ without saying what that period is, but it seems unlikely that this is anything more than sloppy wording, with statutory leave running in weeks, one week of leave should be sufficient or else the rules would be nonsensical and open to challenge.
The wording of the Coronavirus Job Retention Scheme Factsheet (published 29 May 2020) suggests that it is not necessary that the employee remains on furlough at the point that the new scheme is introduced, provided that they have been validly furloughed (for a minimum three week period) prior to that. If this is correct it would allow an employer to re-furlough employees who were subject to a rotating furlough arrangement prior to the introduction of the new scheme.
If an employee was not furloughed for the first time by 10 June 2020 then the employer will not be permitted to claim their pay under either the pre or post 1 July 2020 CJRS scheme. This is because a full three-week furlough period is required prior to 30 June 2020 in order to qualify under either scheme. There will be no minimum furlough period from 1 July 2020. However, any furlough arrangement agreed between employer and employee reported in a claim to HMRC must still cover a period of at least a week.
When the new scheme was announced there was no exception for those on family leave. This meant that employees who were on statutory family leave and in receipt of less than the lower of 80% of pay and £2,500 would have needed to either agree to short notice to end their statutory family leave early so that they could be furloughed by 10 June 2020 and remain eligible under the new scheme, or remain on statutory family leave with the risk that they were made redundant on their return from leave because there is no work for them and they cannot be furloughed as the scheme has closed to new entrants.