Notice periods no longer covered by furlough

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HM Treasury has confirmed that statutory and contractual notice periods will not be covered by the Coronavirus Job Retention Scheme from 1 December.

The updated guidance says that employers can still make staff redundant while they are on furlough and that employer can continue to claim while employees are serving a statutory or contractual notice period, but that grants cannot be used to substitute redundancy payments.

However, for claim periods starting on or after 1 December, employers cannot claim for any days on or after 1 December 2020 during which the furloughed employee was serving a contractual or statutory notice period (this includes people serving notice of retirement or resignation).

If an employee subsequently starts a contractual or statutory notice period on a day covered by a previously submitted claim, employers will need to make an adjustment.

“If you make an employee redundant, you should base statutory redundancy and statutory notice pay on their normal wage rather than the reduced furlough wage,” says the HM Revenue and Customs guidance.

On Wednesday, the government published its official guidance for the Coronavirus Job Retention Scheme, which has been extended until 31 March 2021.

It confirmed that from 1 November 2020, employers can claim 80% of an employee’s usual salary while they’re in furlough, up to a maximum of £2,500 a month.

Any employee that was employed and on payroll on 30 October – providing the organisation has made a PAYE RTI submission to HMRC since the scheme began in March – is eligible.