Are Statutory Notice Periods No Longer Included in Furlough?

In November 2020 the government announced that the Coronavirus Job Retention Scheme would be continuing until 31st March (now extended to the end of April 2021). The announcement confirmed that employees on payroll as at 30 October would be eligible for the payments providing the business had made a PAYE RTI submission to HMRC since CJRS first launched in March 2020.

Despite the dwindling generosity of CJRS in recent months, the reinstalled version of the scheme would see rates return to their initial 80% values.

One part of the announcement, however, did imply there would be changes, as the government confirmed it was reviewing statutory notice periods.

Can staff be made redundant on furlough?

The Treasury has confirmed that, from 1 December, statutory and contractual notice periods will no longer be covered by the CJRS. That doesn’t stop any business from making necessary redundancies, but it may change whether those people can be furloughed whilst serving their notice periods. For any business in the difficult position of needing to make staff redundant, payroll departments and, of course, outsource payroll Bureaux must now apply the following rules:

  • Redundancy pre-December 2020

Where the claim period relates to November, companies can still claim for furloughed employees who are serving notice periods. CJRS payments must not, however, be used to substitute redundancy payments.

  • Redundancy from December 2020 onwards

For claims from 1 December, companies must not claim for furloughed employees serving contractual or statutory notice periods or notice of resignation or retirement.

How do you calculate redundancy? What are the rules?

The government guidance confirms that, aside from the changes to furlough payments during notice periods, the process for running a redundancy exercise remains as normal with all notice and consultation periods operating as usual.

Statutory redundancy pay is determined by age, pay and the length of service. Furlough should not influence the redundancy pay.

What about Re-employing staff

The new guidance does clarify that, where employees were made redundant (or simply stopped working) after 23 September but have now been placed back on payroll, they will qualify for furlough payments provided a PAYE RTI submission made between 20 March 2020 and 30 October 2020 included a payment of earnings for that employee.

We can manage your payroll changes

There has been a huge amount of change in payroll due to CJRS, which means that businesses have had to spend a great deal of time to ensure they are compliant.

We can do all of that for you. Talk to us now.

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