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NB: New Treasury Direction announced covering flexible furlough from 1 July

HM Treasury has just issued a further Direction setting out the rules that will apply for flexible furlough arrangements, from the 1 July 2020 until the 31 October 2020.

In summary, the main points are:

  1. Written agreement: employers should discuss and agree the proposed new arrangements with their staff and then confirm this in a new or updated written agreement. There is no legal requirement for the employee to give their written agreement in return but it is best practice to do so. The agreement will need to be updated every time arrangements change. These should be kept for five years, being the period of time HMRC can carry out an inspection.

  2. Employers must have made previous claims: Employers will only be able to participate in the amended scheme from the 1 July, if they have made a claim under the original scheme by the 31 July.

  3. Employees must have been furloughed prior to the 1 July: The Scheme is only open in respect of employees who have been furloughed for a minimum of three weeks beginning on or before the 10 June 2020 (with some exceptions, for those returning from family related leave and armed forces reservists).

  4. No minimum furlough period: the current minimum period of three consecutive weeks no longer applies. Flexible Furlough arrangements can last for any period of time.

  5. Maximum number of people that can be furloughed: Employers cannot claim under the scheme for more people than the maximum number of people for whom they have claimed in any previous pay period.

  6. Flexible working arrangements: there is no minimum or maximum amount of work that can be done – employees can undertake any work pattern/hours/days as agreed with their employer.

  7. Full pay: employees should be paid in full for the time they actually work.

  8. Holidays: continue to accrue as normal.

  9. Restrictions while furloughed: on the days when an employee is furloughed, and the employer is claiming under the scheme, they are still not permitted to do any work, apart from training, volunteer, or working for another employer (with agreement).

  10. Calculating the amounts payable: the Direction sets out in great detail the means of calculating the amounts payable by the employer and those that can be claimed under the Scheme. During July, the grant will cover usual hours not worked.



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