Edwin Coe LLP (England-Wales): Furlough Leave – Clarification on Notice Periods

On Friday 26 June 2020, the Government published a third Treasury Direction on the Coronavirus Job Retention Scheme (the Scheme).

In our blog of 2 July 2020, issued just after the Treasury Direction was published, we highlighted a potential alarm bell in relation to notice periods and claiming under the Scheme. The Direction stated that integral to the purpose of the Scheme was that:

the amounts paid to an employer pursuant to a CJRS claim, are used by the employer to continue the employment of employees in respect of whom the CJRS claim is made.

This wording caused some confusion and potentially suggested that, contrary to previous guidance, the grant could not be used to reclaim any part of a notice payment made to any employee working their notice period whilst on furlough.

This has now been clarified by the Government’s latest published guidance. To the relief of many, the Government has confirmed that employers can continue to claim the grant for a furloughed employee who is serving a statutory or contractual notice period. The guidance does however state that the grant cannot be used for redundancy pay.

We will continue to monitor the situation and provide further updates as they become available. If you have any questions, please contact Linky Trott or any member of the Furlough Advice & Support Team.

To review our previous Covid-19 updates, please click here.

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