Kate Palmer from Peninsula UK outlined how the furlough changes will work in the next months and highlighted lack of clarity in some areas.
Employers should not panic, although the deadline for furloughing staff is fast approaching and there is a lack of clarity about the implications of the flexible furlough scheme, says an HR expert.
Following the Chancellor’s statement on Friday night, the furlough scheme is changing, closing to new entrants from 10th June. He also announced plans to taper the scheme from August, with employers starting to pay an increasing share of the costs and there was news that a flexible furlough scheme would start from July.
Kate Palmer from HR consultants Peninsula UK said the full guidance on how the flexible furlough scheme would work will not be released until 12th June, two days after the furlough scheme closes for new entrants.
Employers did not have to bring people who are currently on furlough back part time, she said. They could continue to keep them on full furlough.
She pointed to a lack of clarity about who can be furloughed from July. Either it is employees who have been on furlough from 10 – 30 June, even if they have had a previous minimum three-week period of furlough at any point since the start of the scheme or employees who have been furloughed at any time since the start of the scheme.
Palmer stated: “Until the Government confirms this, we are unable to give a definite answer. If the more restrictive interpretation is correct, employers may choose to keep maximum flexibility of being able to furlough anyone again in the future by furloughing all employees for the period of 10 – 30 June. If, when we receive more guidance on 12 June, it becomes apparent that the second interpretation is the correct one, then employers can swiftly bring back those employees furloughed from 10 June but will not be able to claim for their wages under the Scheme for those days. They would need to fund this themselves.
Alternatively, the employer undertakes an assessment of how many employees, or which employees, they may need to furlough in the future and ensures that they are on furlough from 10 June to 30 June (some/all may already be). They will then be in a position to furlough them again if, from 1 July onwards, only those employees may be furloughed again.
If the first interpretation is correct but the employer has not acted as set out above, only those employees who happened to be on furlough from 10 – 30 June can be furloughed again from 1 July. This means that if no employees were on furlough for this period, they are no longer eligible for furlough again.”
Palmer added that if employers wanted to change already furloughed staff to a flexible furlough scheme, they would need to get the employee’s agreement and confirm that in writing, given it was a change to their terms and conditions.
She told employers not to panic, despite the short time to register new employees for furlough and she said those who were worried about contributing to furlough costs should not rush to make redundancies, but rather sit down and calmly work out costs and whether there were other efficiencies they could make, such as cutting overheads if more employees were working from home or suggesting career breaks.