12th November 2020
The government announced last week that it would extend the Coronavirus Job Retention Scheme (CJRS) until the end of March 2021. The scheme has undergone a number of revisions since first being introduced in March and, prior to this latest extension, was expected to come to an end at the end of November or early December 2020.
The latest official guidance on the scheme was published late on the evening of 10 November and contains some concerning comments about possible future changes to the scheme. In particular;
“The government is reviewing whether employers should be eligible to claim for employees serving contractual or statutory notice periods and will change the approach for claim periods starting on or after 1 December 2020, with further guidance published in late November.”
This change is likely to have significant implications for employees and employers in the coming weeks and months.
Up until now, employers had been able to claim under the scheme for salaries of employees serving notice (though not for any payments being made to employees in addition to notice – such as statutory redundancy payments).
Although the exact nature of the change is not yet clear, and will not be clarified until nearer the end of this month, the guidance is clear that a change will be made. Some commentators are suggesting that the scheme could effectively exclude all notice payments in their entirety, whilst others are suggesting that the scheme could be amended to only cover a proportion of notice payments, distinguish between contractual and statutory notice payments and/or cover notice payments only where notice has been given prior to 1 December.
The government are clearly concerned about the impact of the scheme on continued employment and the rationale for the change appears to be that the government intends to only support those employers who do not make redundancies (or penalise those that do, depending upon your perspective). Large numbers of employers have halted (or at least paused) redundancy processes on the back of the extension of the scheme. This approach may now need to be reconsidered in light of the new guidance and these comments. It may transpire that this change is counterproductive and could accelerate pending redundancies.
We will give further updates once the new guidance is issued, but in the meantime please contact one of the team at Leonard Curtis Legal for advice and support on this and other legal issues.