New HM Treasury instructions re CJRS

The Chancellor, Rishi Sunak has made a further Treasury Direction under sections 71 and 76 of the Coronavirus Act 2020 concerning the Coronavirus Job Retention Scheme (CJRS).

The CJRS currently helps employers furlough their employees with significant government support. Employers can currently claim cash grants of up to 80% for eligible furloughed wages to a maximum of £2,500 per month, plus the employer National Insurance contributions and minimum auto-enrolment employer pension contributions on that 80%.

The new Direction was published on 22 May 2020 (but the document is dated 20 May 2020) and makes a number of changes to the first Direction. Among the changes, the new Direction makes it clear that written agreement for an employee to cease all work has to be retained by the employer until at least 30 June 2025. The new Direction also provides further details on the training activities a furloughed employee can undertake and concerning the Transfer of Undertakings (Protection of Employment) Regulations 2006 (“TUPE”) transfer rules.

The new Treasury Direction continues to refer to the scheme as running until the end of June 2020 although the Chancellor has previously announced that the scheme will continue in its current form until the end of July. From 1 August until 31 October 2020, the scheme is expected to continue in a modified format. Further details on the changes are expected to be released shortly and it seems likely that further updated Treasury instructions will be published in due course.

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