Making Employees Redundant While Still on Furlough

Last Friday (10th July 2020), the HMRC issued some further changes to its guidance on the Coronavirus Job Retention Scheme (CJRS). The main change for employers to be aware of is the new wording about making employees redundant during furlough and, in particular, the fact it now says employers can only claim “for a furloughed employee who is serving a statutory notice period”.

A summary of the main points are below:

  • The guidance makes it clear that employers can make employees redundant while they are on furlough.
  • It confirms, as we suspected that employers cannot recover statutory or enhanced redundancy payments under the scheme.
  • In terms of notice pay, it says that “You can continue to claim for a furloughed employee who is serving a statutory notice period”. The guidance wasn’t fully clear on what happens if an employee’s contractual notice period entitlement is longer than their statutory notice period. However, most employees will fall into the statutory notice period. At this stage, it is our belief that contractual notice period will be included as part of the scheme but we urge employers to either check with the HMRC helpline or wait for updated guidance.
  • Payments in lieu of notice (PILON) cannot be claimed under the scheme so please bear this in mind when deciding whether to require an employee to work out their notice period or not.

For further information, please contact our team on 01656 336097 or [email protected]