Yesterday, the Government updated its furlough guidance, following the extension of scheme that was announced last week.
Whilst the majority of the update confirmed information we already know, there were some important pieces of new information.
One of these was a warning surrounding the payment of employees’ notice pay whilst on furlough.
For the duration of the scheme, employees have been able to “work out” their notice periods whilst on furlough. They must receive 100% of their normal salary for their notice period but employers have been able to claim the relevant percentage back from the government under the furlough scheme.
The latest guidance sets out that the government is reviewing whether employers should be eligible to claim for employees serving contractual or statutory notice periods. It says that the government will be changing it approach for claim periods starting on or after 1 December 2020.
Unfortunately, there is no further guidance on this at this stage but more is promised at the end of this month.
We will update you as soon as this guidance is released but we anticipate that employers will no longer be able to claim under the scheme for employees who are under notice after the end of December.
Presumably this move aims to deter businesses from making redundancies over the next few months.