Example 1
Mary has been furloughed in April for 4 weeks but is working again. Her employer does not furlough Mary in June.
The result: The employer can furlough Mary again, on and off, from 1st July and make a CJRS claim, as she has been furloughed in the past.
Example 2
Joseph has been furloughed in March but is now back working again. His boss reaches agreement with Joseph to furlough him again on 10th June. Joseph will remain furloughed throughout the rest of June.
The result: The employer can make a CJRS claim for the 3 week period to 30th June.
The employer can also furlough Joseph again, on and off, from 1st July onwards and make a CJRS claim, as he has been furloughed in the past.
Example 3
Hamish had been furloughed previously for the first 3 weeks of May. He is now back working. His employer, in agreement with Hamish, wants to furlough him again from 21st June.
The result: The employer can furlough Hamish again, on and off, from 1st July onwards and make a CJRS claim, as he has been furloughed in the past.
However, we don’t think the employer will be able to make a CJRS claim for the period from 21st June to 30th June inclusive, even if Hamish remains furloughed for the whole of July. Why? Because from 1st July onwards claims cannot be submitted for periods that overlap calendar months and, by the end of June, he will only have been furloughed for 10 days.
Example 4
Jenny is furloughed for the first time by her employer on 2nd July.
The result: The employer will not be able to make a CJRS claim as Jenny has not been furloughed on or before 30th June.
Example 5
Conor is furloughed for the first time by his employer on 9th June and remained so throughout the rest of June.
The result: The employer can make a CJRS claim for the 22 day period to 30th June.
As Conor was a new entrant on or before 30th June, his employer can furlough him again, on and off, from 1st July onwards and make a CJRS claim.
Example 6
Victoria is furloughed for the first time by the employer on 18th June and remained so throughout the rest of June.
The result: We don’t think the employer will be able to make a CJRS claim for the period from 18th June to 30th June inclusive, even if Victoria remains furloughed for the whole of July. Why? Because from 1st July onwards claims cannot be submitted for periods that overlap calendar months and, by the end of June, she will only have been furloughed for 13 days.
Even though Victoria was a new entrant on or before 30th June, as she was not furloughed on or before 10th June she hasn’t completed the 3 week furlough period under the present rules therefore the employer won’t be able to furlough her, on and off, from 1st July.
Conclusion
If a business is intending to furlough someone for the first time or to re-furlough someone, then, from a CJRS perspective, it should be done on or before 10th June. There may well be good commercial reasons why this should not be done.
Footnote
If the employer has not furloughed anybody to date and wishes to do so, then at the very latest, they should consider furloughing the employee by 30th June (preferably 10th June), otherwise they won’t be able to claim under CJRS from 1st July onwards. There may well be good commercial reasons why this should not be done.
Businesses need to remember that for CJRS claim purposes from 1st July the number of furloughed employees they can claim for cannot be greater than the maximum number of employees claimed under any previous claim within the period up to and including 30th June.
Please note that these are not Government examples of how the revised CJRS works nor is it their sanctioned interpretation of how the proposed changes will work. These are our interpretation of the new rules. As the Government’s interpretation of the new rules would appear not to be fully released until 12th July, we felt it important to get out now our fear that a post 10 June furlough claim will be rejected.
We will update this blog should there be further information forthcoming prior to 10 June.