Important information regarding furlough, notice periods and PILON
New guidance now states that as of 1 December 2020, an employer can no longer claim through the CRJS for any days during which an employee is serving either their contractual or statutory notice period. Guidance also confirms that as of 1 November 2020, PILON cannot be claimed for.
For the remainder of November 2020, government guidance suggests you can continue to claim through the CRJS for furloughed employees serving statutory notice as a result of redundancy. However, for any claim periods starting on, or after 1 December, no further claims can be made.
If an employee starts a contractual or statutory notice period on a day covered by a claim period that you have previously submitted, then you will need to make an adjustment.
If you have any employees currently serving notice, their notice period may be only partially claimable. For example, if you have an employee who starts serving a four week statutory notice period on 16 November 2020, you will only be able to continue claiming through the CRJS for that employee for two weeks of their notice period, up until 30 November 2020. As from 1 December 2020 you will no longer be able to claim for this period. Instead, the remainder of the notice period will be payable by the employer.
If you are planning on making redundancies in the near future, you could consider the following options:
- Leaving the affected employees on furlough until the CRJS is due to end (currently in March 2021) and then address redundancies after this date;
- Move ahead with redundancies in the usual way, but ensure you, as the employer, are covering all costs and payments associated with the affected employees notice period, either by:
1. Not claiming for the employee through the CRJS while they work their notice period;
2. Paying the employee in lieu of their notice period in full.
- Move ahead with redundancies in the usual way, but set the confirmation of redundancy date as 31 March 2021. Employees can then benefit by remaining on furlough for the remainder of the CRJS. A payment in lieu of notice can then be made by the employer after this date.
For employees that you may have made redundant or who have stopped working for you on or after 23 September 2020 that you have now re-employed to benefit from the CRJS, you may also want to consider the following options for their re-employment:
- If notice and redundancy payments have already been made to an employee, you can re-employ them and change the termination date to the date in which the CRJS is expected to end. This means that no further payments will be owed to the employee on the new termination date as the employee has already received the relevant pay. However, bear in mind that, should the employee turn a year older or gain a further years’ continuous service with you during this period of re-employment, it may mean that they are entitled to additional redundancy or notice payment;
- If there has been a break in service of two weeks or more since the employee’s dismissal and the re-employment date, then you could reinstate the employee on a fixed term contract, which would end in line with the CRJS. In this case, you would only owe one weeks’ notice pay at the end of the fixed term contract.
- The employee who is re-employed could repay both their redundancy and notice pay to you and, at the end of the CRJS, if their position is still redundant, their payments should be recalculated.