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COVID-19 - Employment Law Update 4: Coronavirus Act 2020 - Treasury Direction to HMRC

Coronavirus Act 2020 - Treasury Direction to HMRC

On 15 April 2020 the Treasury published Directions for HMRC under powers conferred by the Coronavirus Act 2020.   The Directions provide guidance and instructions for making payments under the Coronavirus Job Retention Scheme.

Previous guidance stated that employees employed from 28 February 2020 were eligible for furlough leave.  However, this has now been extended to 19 March 2020, this only applies if the employer has submitted real time information payroll data to HMRC by 19 March 2020.

The Direction states that in order for an employee to be eligible for furlough, both employer and employee must agree in writing that the employee is to conduct no further work for the employer; this may be via email.  Guidance provided prior to the published Direction merely stated that the employer only required to give the employee written notification of them being furloughed, not a written agreement as now stated in the Direction.

There is confirmation in the Direction that the Furlough Scheme applies to everyone who is furloughed as result of Coronavirus and is not limited to those who would otherwise be made redundant.

Employees will only be entitled to regular salary or wages, therefore performance related bonuses or discretionary payments made by the employer, such as tips, should be disregarded.  Any salaries that are conditional on any matter must also be disregarded.  However, employers are able to claim for earnings which they can reasonably expect to be pay to the employee e.g. deferred earnings.

Coronavirus Job Retention Scheme

HM Treasury announced on 17 April 2020 that the Coronavirus job retention scheme (the furlough scheme) has been extended from 31 May 2020 to the end of June.

Clarification has also been provided on annual leave entitlement during furlough leave.  Employees are able to take annual leave while on furlough leave with the employer having to ‘top up’ their wage to 100% of normal pay.

Statutory Sick Pay

HMRC has stated that employees do not qualify for Statutory Sick Pay if they are on furlough leave.

On 16 April 2020 the Government published the Statutory Sick Pay (General) (Coronavirus Amendment) (No. 3) Regulations 2020.  This states that if a person falls within the extremely vulnerable category and has been advised to shield and is therefore unable to work then that person is considered to be incapable of work.

Disclaimer – The above facts are accurate as of 16:45 on 21 April 2020.

For advice on this, or any other employment matter, contact the employment team on 01905 723 561 or email: or

Added: 22 Apr 2020 09:58

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