Job Retention scheme – Flexible Furlough

Employers should now be aware that the current Job Retention (Furlough) Scheme has come to an end. From 1st July, a new Flexible Furlough scheme did replace it, offering employers far greater flexibility.

An employer’s dilemma

In short, businesses did welcome the original scheme. Moreover, it did achieve its objective of safeguarding jobs. But in many ways, it was very restricting. Staff were subject to furlough – or they were not. Those on furlough couldn’t carry out any work for their employer. Put that together with serious consequences for anyone found to be misusing the scheme, and it was rather punitive.

For many businesses, this gave rise to many concerns and questions./

A key issue for lots of our customers was that businesses didn’t have enough work for their employees full time. But did need them on a part-time basis – however, the rules didn’t permit this. This meant employers had a tough predicament over whether they should:

  • continue to employ staff who were not necessary at full capacity, or;
  • furlough them and run the risk of letting customers down.

The government eventually came to recognise this, and the new flexible furlough scheme was born.

What are the key differences?

The clue is quite literally in the title. The new scheme allows staff to work on a flexible or part-time basis, over a minimum Furlough period of 7 days rather than 3 weeks as previously. This flexibility is a welcome change for many businesses, meaning they can put employees on and off the scheme as the company requires.

Staff will receive 100% of their pay for hours that they work and for the remaining time, they receive 80% of their salary, up to £2500 per month. The business can then recover this as a grant from the Government as before.

Some key points to mention here:

  • Staff only have entitlement to flexible furlough if they were previously on furlough under the old scheme. Employers must keep records of their furlough for 5 years in case HMRC wishes to inspect them.
  • The Government contributions towards furlough are reducing from August, but employees on the scheme will still receive 80% minimum and 100% for any time they work
  • The Job Retention Scheme ends on 30th October 2020.

Employees who are asked to work under this scheme are unable to unreasonably refuse, given they are under contract with their employer. Businesses have, however, been asked to be flexible and understand where possible, particularly where employees have commitments to family members or childcare issues. The normal summer school holiday period is approaching so employees should be prepared to utilise the arrangements for childcare that they normally would and inform their employers immediately if they foresee any issues with this.

Zero-hours workers are entitled to turn down an offer of work, however they will not be paid for that work, in the normal way.

Award-winning People Matters HR are one of the North West’s leading consultancies offering a fresh new approach to managing HR in the SME market. The company was founded in 2011 by Niel Cope, to provide businesses across the region with a bespoke, Director-level outsourced HR solution at a fraction of the cost, allowing customers to create strong leaders, engaged teams and a better ROI. The impressive client list includes: UAP Limited, Eventura, Rowe Hankins Ltd, Z-arts, and Freedom Logistics.