Flexible furlough

The Age of Flexibility – Flexible Furlough

The government has released guidance regarding the new flexible furlough arrangements that will be available for employers to operate as we all ease out of lock down and before the scheme closes at the end of October 2020.

The new flexible furlough scheme is due to take effect from 1st July 2020. Although this is what a lot of us have been waiting for and having the ability to rotate employees between working and non-working is a godsend, for some when looking at reviving the workplace gradually, the complexity of the arrangements and calculating the flexible furlough payments is a little more complicated.

But never fear, Streetwise HR is here, see our summary below in plain English.

What does flexible furlough mean?

Prior to 1st July 2020 if you wanted to furlough an employee it would have to have been for a minimum period of 3 weeks (hence the 10th June deadline), during which they could not do any work for you at all.

Flexible furlough will mean that employees will be able to work for some days (or even part days) and be on furlough leave for the other days, up to their usual working hours. Great for planning the slow ease back into operations where you may not have the amount of work or funds for your employees to return to work full-time but you want to keep them in the business.

For example, an employee who normally works Monday-Friday each week would be able to work Monday and Tuesday and then be on furlough leave for Wednesday, Thursday and Friday. Proportions are to be decided between employee and employer.

The only stipulation is that employees who you would like to flexibly furlough must have been furloughed for a minimum of 3 weeks prior to 30th June 2020.

Also, significantly, the minimum three-week period for furlough has been removed as of 1st July 2020. And from the same date you will not be able to claim furlough for more employees than you have in any previous claim. For example, if you have only ever claimed for a maximum of 20 employees during any period between 1st March and 1st July 2020, you will not be able to exceed this amount going forward.

The claim periods for these new flexible arrangements are going to be limited. So, any claim in respect of the period before 30th June will have to be made before 31st July. Any claim in respect of a period after 1st July must start and end with the same calendar month which means periods of furlough leave will not be able to overlap months.

Are there any exceptions?

There is an exception to the rule for employees returning from maternity, paternity or adoption leave after 10th June 2020. These employees can be furloughed as long as you have previously used the scheme before 10th June 2020. If you are thinking of using this for returners, best to start sowing the seed and communicating with those employees now, this will also allow you to potentially get in-front of any flexible working requests which all go into the pot for the future planning of your workforce.

How do I document the arrangements, and how long do I have to keep records for?

The flexible furlough arrangement is a brand-new amendment to employee terms and conditions. When you originally designated employees as furloughed, chances are you confirmed this in writing (you should have if you didn’t!) and within that confirmation you stated that employees could not carry out any work for you during the furlough period. So, it only makes sense that to agree a flexible furlough arrangement, it will be necessary for the furlough agreement to be amended or a fresh agreement entered into to record the new flexible terms.

The rules around record keeping will remain the same however there are a few additional points to note in respect of flexible arrangements. For those employees on flexible furlough leave, you must keep a record of the amount claimed and the claim period for each employee, the claim reference number, the usual hours worked by the employee, details of the calculation used to calculate those hours and the actual hours worked during the furlough period. This record must be retained for 6 years.

The government has provided an online furlough calculator. We would suggest you use this calculator to confirm your figures, and for record keeping, save a copy of the online calculator on to each employee’s personnel record.

What do I do next?

We make no bones about it, for the majority of us these changes will force a major review of existing employment arrangements, coupled with the ongoing riddle of planning for an uncertain and unknown future. There will be additional costs to consider and plan for and whilst the schemes are being wound down to help with the impact of these, the reality is that for many it may just not be affordable into the foreseeable future and may trigger the need for you to make decisions regarding employee numbers and terms of employment.

Streetwise HR is here to support you, whether it’s assisting with workforce planning and using the flexible scheme over the next few months, providing advice and guidance on potential redundancies and helping you avoid the pitfalls which could lead to tribunal claims and compensation payments being paid out. Please do get in touch if we can be of assistance. Get in touch today by calling the team on 0844 682 7488.

This document has been created on Tuesday 16th June 2020. Please note that details are subject to change. Updates will be created and issued as and when available.

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