Due to the unprecedented level of uncertainty faced by the UK economy, the Government has stepped in to ensure that there is a degree of stability via the Coronavirus Job Retention Scheme (CJRS).
Under this scheme, employers can claim 80% of wages for a worker who has been furloughed via the Government CJRS grant. In addition, those who were made redundant and would have qualified under the CJRS can be re-employed to take advantage of its benefits.
Are new recruits covered under the CJRS?
One group of employees who do not qualify to be furloughed under the CJRS are those hired after 28th February 2020. This is because under the CJRS an employee must have been on an employers’ PAYE payroll on or before the 28th February 2020. This is a serious challenge for employers wanting to retain newly hired staff during this period of economic uncertainty.
It is likely that this cut off was introduced to stop any fraudulent claims for employees added to the payroll especially to benefit from the CJRS. However, the consequences for this could be dire for newly recruited employees as their employers will have to consider dismissals (where they will have no statutory entitlement to redundancy pay) or unpaid leave.
Thousands of people are reported to have signed a petition asking the Government to reconsider the position on new recruits under the CJRS. However, it remains to be seen whether any changes will be made to the eligibility criteria.
Coronavirus Business Interruption Loan Scheme (CBIL) and Business Interruption Policy (BIP)
In the meantime, employers should consider the other measures available to them to see if they assist with retention of staff not eligible to be furloughed.
Not covered under the CJRS?
Employers can dismiss employees with less than two years’ service without liability for a statutory redundancy payment, and will either need to give notice or pay in lieu of contractual or statutory notice entitlements.
Employers that offer unpaid leave will need to document the employee’s agreement to this and keep the situation under review.
Employees who are dismissed or put on unpaid leave will have to utilise benefits, such as universal credit, and rent or mortgage deferrals that might be available.
How can Nelsons help?
Our expert Employment team has extensive knowledge and experience in all areas of employment law. If you or your business has an issue that needs to be resolved or there is a need for specialist advice, we will be happy to assist you.