Furlough Update Including For Directors

Furlough Update Including For Directors

The Government has published yet a further update to the Coronavirus Job Retention Scheme – they really are keeping employers and employment lawyers on their toes!

The two new developments are both welcome news. Firstly, it has been confirmed that Directors who pay themselves annually (usually through dividends I would imagine) can claim the grant under the Scheme. The full wording regarding Directors states:

“Those paid annually are eligible to claim, as long as they meet the relevant conditions. This includes being notified to HMRC on an RTI submission on or before 19 March 2020, which relates to a payment of earnings in the 19/20 tax year. The requirement for there to be payment of earnings in the 19/20 tax year applies for any employee being claimed for under the scheme, irrespective of how frequently they are paid (e.g. weekly, fortnightly or monthly). This will be relevant for those on an annual pay period if the last payment notified to RTI was before 5 April 2019 and no further payments were notified until after 19 March 2020.”

This is great news for small business owners who remunerate themselves as Company Directors. However, please be aware that a furloughed Director cannot undertake any work for the business save for in respect of their statutory duties.

The second update confirms that “Whilst on furlough, employees who are union or non-union representatives may undertake duties and activities for the purpose of individual or collective representation of employees or other workers.”. This is as we expected, but provides clarification that furloughed employees can still act as companions at the likes of disciplinary and grievance hearings or for the purposes of collective consultation where an employer is proposing to dismiss 20 or more employees in a 90 day period.

If you require advice or support in relation to either making redundancies or furlough leave, please contact James Twine on 01752 663295 or email info@wolferstans.com


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