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On 26 June 2020 HM Treasury issued an additional Treasury Direction highlighting the new rules which are to apply under the amended Coronavirus Job Retention Scheme (CJRS).

The new Direction confirms that the original CJRS will end on the 30 June with the amended CJRS, which allows for ‘flexible furlough’ arrangements, to apply from the 1 July. The scheme will close on 31 October 2020.

The final date for employers to make claims in respect of the original CJRS is the 31 July. Employers will not be able to claim under the new scheme unless they have made a claim, under the original scheme, by this date with regard to an employee who has been furloughed for a period of no less than 21 calendar days, on or before 10 June.

Exceptions to the Closure of the CJRS to New Entrants

The new Direction confirms that the 10 June cut-off will not apply to those returning from family leave or to armed forces reservists.

  • Family leave returners: applies to employees who have been absent by virtue of: adoption leave; maternity leave; paternity leave; parental bereavement leave; shared parental leave. The employee must have taken the period of family leave on or before 10 June 2020 and it must have ended after 10 June 2020.
  • Armed forces reservists: applies to employees who have been called out or recalled for service in accordance with the Reserve Forces Act 1996. The employee must have been called out on or before the 10 June 2020, with their return being after 10 June 2020.

Employer and Employee Agreement

The new Direction confirms that employers and employees are required to reach an agreement in respect of any flexible furlough arrangements.

The agreement must be in writing, or confirmed in writing, be made prior to the beginning of the furlough period and must state that:

  • The employee will not carry out any work in relation to their employment; or
  • The employee will not carry out the full amount of their usual hours in relation to their employment.

Employers are required to retain the agreement until at least 30 June 2025.

Claim Calculations

The new Direction outlines what will constitute a ‘claim period’ under the new CJRS and confirms that the CJRS calendar months will be:

  • July 2020;
  • August 2020;
  • September 2020;
  • October 2020.

The Direction also provides useful guidance on how to calculate:

  • The amounts payable by the employer under the scheme; and
  • Claims made in respect of employees who have been flexibly furloughed.

The new Direction can be found here:  https://www.gov.uk/government/publications/treasury-direction-made-under-sections-71-and-76-of-the-coronavirus-act-2020

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