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Furlough Scheme Extension and Re-employment: What it Means

The government recently announced its plans to extend the furlough scheme until the end of March 2021, and provided a factsheet outlining what this means for employers.

One provision that will be of huge importance is as follows:

“Employees that are re-employed: Employees that were employed and on the payroll on 23 September 2020 (the day before the Job Support Scheme announcement) who were made redundant or stopped working afterwards can be re-employed and claimed for. The employer must have made an RTI submission to HMRC from 20 March 2020 to 23 September 2020, notifying a payment of earnings for those employees.”

This means that an employee whose employment ended after 23 September 2020, can be re-employed and will then be eligible for the furlough scheme.

What does this mean for you?

 

With the furlough scheme initially scheduled to end in October, many employers were forced into the difficult position of needing to make redundancies to save money. With the furlough scheme back in place, you may get approached by ex-employees asking you to consider re-employing them so that they can be placed back on furlough. It’s important to realise that this is totally your choice, you may want to offer as much support to those ex-employees as you can, or you may choose not to.

What may affect your decision to do this is to weigh up what the potential effects of doing so will have on both the Company and the ex-employee, and unfortunately the government guidelines are still unclear on how this process would work in practice and the legalities surrounding it. So, as per the norm at the moment in our little world of grey, we still have a lot of unanswered questions.

Questions yet to be clarified and remain unanswered

 

  • If an employee’s employment has already ceased, will re-employment count as new employment, or a continuation? What will happen to their continuous employment rights?
  • Will the employee be required to pay back any redundancy payment?
  • If they are currently working their notice, will they need to complete their notice period, or will the notice of dismissal be rescinded?
  • If the employee’s position is likely to be at risk after 31 March 2021, can (or should) you use the scheme? And, in the event of a redundancy being made at the end of the scheme, what will the correct procedure be?

If you believe there will be a need for the role in the future but can’t afford the staff costs in the short term, this provision could be valuable. However, if the role is unlikely to be required in the future there may be no real justification to re-employ the employee. Don’t feel pressured into this and seek advice to make sure you have thought about all the implications.

What now?

Before making any decisions about re-employing staff, you should seek further advice. To get professional advice from your local HR experts, Streetwise HR, please don’t hesitate to get in touch. Send us a message here or to chat with one of our HR gurus, give us a call today on 0800 682 7488.

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