Unite the Union has written a letter before action to the Chancellor of the Exchequer, Rishi Sunak, seeking urgent clarification of discrepancies between the Treasury Direction and HMRC Guidance.
The Coronavirus Job Retention Scheme (‘CJRS’) enables employers to furlough employees and claim a grant to cover up to 80% of the wage costs (capped at £2,500 per month).
An important question is whether, and if so in what circumstances, those who are entitled to statutory sick pay because they are sick, self-isolating or shielding, can be furloughed.
HMRC Guidance on the CJRS suggests that entitlement to SSP does not preclude an employee from being furloughed.
However, the Treasury Direction contains some complicated rules about furlough and entitlement to SSP which do not appear to be consistent with the HMRC Guidance. According to the Treasury Direction:
- An employer cannot initially furlough an employee who is entitled to SSP. Such an employee can only be furloughed once they cease to be entitled to SSP. This is particularly problematic for those who are shielding or who are sick on a medium or longer term basis because in many cases it means they cannot be furloughed at all. Entitlement to SSP lasts for up to 28 weeks, which is longer than the duration of the CJRS.
- The position is different for an employee once furloughed. If an employee becomes entitled to SSP during a period of furlough they can remain furloughed.
Another discrepancy between the HMRC Guidance and the Treasury Direction relates to pay.
- The Treasury Direction suggests that where an employee is entitled to SSP (whether it is claimed or not) the amount that the employer can recover from the CJRS in relation to that employee is reduced by the amount of SSP (i.e., £95.85 per week).
- There is no suggestion of that in the HMRC Guidance. Rather, the HMRC Guidance makes the different point that an employer cannot simultaneously claim from the CJRS and the SSP rebate scheme.
Unite the Union have called on the Government to resolve these discrepancies by amending the Treasury Direction so that it is consistent with the Guidance.