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17 April 2020

Employees who are shielding or sick – can they be furloughed?

Employees who are shielding or sick – can they be furloughed?

Yes, according to HMRC’s Guidance on making a claim under the Coronavirus Job Retention Scheme (“CJRS”). 

Employees who are unable to work because they are shielding in line with public health guidance (or need to stay home with someone who is shielding) can be furloughed.” 

So, if someone is shielding, they can be furloughed under the CJRS. Entirely straight-forward. Entirely clear. 

Or maybe not.

The HMRC Guidance, which was updated on 15 April for the fourth time) came out at the same time as the Treasury issued a Direction to HMRC on how to process claims.  The two seem to be in conflict (and not just on this question).

 

The Direction states that:

“An employee is a furloughed employee if-

(a) the employee has been instructed by the employer to cease all work in relation to their employment,

(b) the period for which the employee has ceased (or will have ceased) all work for the employer is 21 calendar days or more, and

(c) the instruction is given by reason of circumstances arising as a result of coronavirus or coronavirus disease.”

 

So, if an employee who has been directed to self-isolate can’t work from home, then applying the definition, you are entitled to treat them as furloughed if you instructed them to cease all work in relation to their employment because you have given that instruction by reason of circumstances arising as a result of coronavirus (i.e. the Government advice/NHS letter telling them to self-isolate).

The question mark arises as being required to stay home definitely entitles them to SSP (any question mark in this respect having been eliminated by the latest amendment to the SSP rules issued on 16 April).

The Direction, which is not drafted for ease of comprehension, appears to provide that, where the employer gives the instruction to cease work at a time when SSP is payable or liable to be payable to the employee (whether or not it is paid), the period of furlough cannot commence until the period of SSP has ended.  This would mean you can’t furlough someone who had been ordered to self-isolate as they are liable to be paid SSP.

This will come as something of a blow to employers up and down the country who have already furloughed employees who fall within the definition of “clinically extremely vulnerable” or their family, friends and carers.

 

So, what should they do?

There is no easy answer not least as the status of the Direction is uncertain.  The safety play may be to switch them onto SSP.  However, this is likely to result in a significant drop in income and so if you are reluctant to do this (especially retrospectively), probably the best advice is “Keep Calm and Carry on”.

The Government has moved the goalposts a number of times and, generally, to allow more claims under the CJRS rather than fewer.  So whereas an employee had to be on the payroll at the end of February (which excluded those who moved to a new job in early March), now an employee can be furloughed if the employer submitted a tax return which included that employee up to 19 March (the day before the Government announced the scheme).  So, what with this not being the only area of conflict, hopefully, the Treasury will amend its Direction and ensure it tallies with the HMRC Guidance.  If not, employers may decide to submit a claim in good faith.  It is not abusive or contrary to the exceptional purpose of the scheme, which is to provide payments to employers for staff who don’t work due to the health, social and economic emergency resulting from the coronavirus.  And, what’s more, HMRC told you it was ok.

For further information or advice please contact our employment team on 01753 889995 or email enquiries@bpcollins.co.uk

Jo Davis

Jo Davis

Tel: 01753 279029 | 07894 608230

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