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CJRS sense check – employee resigning

We’re not lawyers but meant to understand and interpret this!

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12 November 2020 version of the CJRS Treasury direction contained the extra clause:-

 

Circumstances in which a CJRS claim may not be made

27. A CJRS claim must not be made by an employer in respect of a day upon which their employee- (a) is on notice of termination of the employee’s employment with the employer on that day if that day falls in the period-

(i) beginning on 1 December 2020, and

(ii) ending on 31 January 2021, or

(31 January 2021 has been amended to 30 April 2021 by the 25 January 2021 direction)

 

 

Much of the commentary around this seems to be when the employer has made the employee redundant and / or put them on notice.

Am I right however that the wording also includes the situation when the employee has resigned and is in their notice period? Therefore no CJRS claim by the employer?

Replies (16)

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Giraffe
By Luke
02nd Mar 2021 12:22

Yes, I believe you are correct and there is no CJRS claimable while the employee is on furlough during their notice period even if they have resigned.

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Replying to Luke:
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By Wanderer
02nd Mar 2021 13:46

Thanks Luke.

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By paul.benny
02nd Mar 2021 13:35

If an employee is furloughed, why do you need them to 'work' their notice?

Surely you could agree immediate termination?

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Replying to paul.benny:
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By Wanderer
02nd Mar 2021 13:47

Why would the employeee agree to this? They can get their furlough pay.

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Replying to Wanderer:
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By paul.benny
02nd Mar 2021 16:07

Because they can then start their new job immediately. Admittedly, I've assumed that they have resigned because they have a new job (otherwise why resign).

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Replying to paul.benny:
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By Wanderer
02nd Mar 2021 16:13

But there are no restrictions on doing another job whilst on Furlough anyway. (Unless in their contract however no one had thought about that until CJRS started just under a year ago, so there's almost never a contractural restriction.)

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By gillybean04
02nd Mar 2021 17:54

I think they're alluding to the possibility of being required to work during the notice period, by the current employer.

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Kitten
By Hazel Accounts
02nd Mar 2021 15:07

Check their contract for their notice period and what level of pay they are entitled to (I know this isn't same as claiming CJRS but may help employer reduce unrecoverable costs). It's a complicated area - more info here on ACAS site and they have a helpline (never tried it so don't know how easy to get through)
https://www.acas.org.uk/final-pay-when-someone-leaves-a-job/pay-during-t...

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Replying to Hazel Accounts:
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By Wanderer
02nd Mar 2021 16:14

It's a good point, but definitely something I would NOT get involved with!

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My photo
By Matrix
02nd Mar 2021 15:17

Yes I think it has changed.

See 11. on here (no affiliation, the link to this firm was provided when I had this issue last year): https://www.ashtonslegal.co.uk/insights/business-news/ultimate-furlough-...

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By Hugo Fair
02nd Mar 2021 16:27

The reason "much of the commentary around this seems to be when the employer has made the employee redundant and / or put them on notice" is because that was precisely why this term was inserted in the Treasury direction. Specifically it was to prevent the employer from being able to use a CJRS claim as a backdoor means of subsidising redundancy ... which would have been the precise opposite of the primary intention of the scheme (to save jobs).

So although, as so often is the case with rapidly written terms, the result is capable of being interpreted as others here have done ... I would have no problem in 'reading' it the other way round - and therefore claiming CJRS whilst an employee worked the notice that he/she had given as part of their voluntary resignation (or rather agreed to be furloughed during that period).

I guess you could argue that this scenario is also contrary to the scheme objectives - but at least it cannot be seen as a deliberate abuse by the employer.

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Replying to Hugo Fair:
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By Wanderer
02nd Mar 2021 16:38

Hugo Fair wrote:

... I would have no problem in 'reading' it the other way round - and therefore claiming CJRS whilst an employee worked the notice that he/she had given as part of their voluntary resignation (or rather agreed to be furloughed during that period).

Leaving the commentary aside, because that is all it is, can you kindly elaborate how you interpret the words I've quoted of the Treasury Direction in this way?
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Replying to Wanderer:
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By Hugo Fair
02nd Mar 2021 17:25

I'm not sure why you feel the commentary should be disregarded ... it was meant to help explain the origins of the issue (and is not speculation but based on first-hand information).
However, my interpretation of the words "employee is on notice of termination" is based on the 3rd word in that phrase. 'On notice' generally (in HR practice) is an indication that the situation results from an employer decision; whereas when it is due to an employee decision I would have expected it to be phrased as 'under notice'. So the Treasury direction could have said "employee is on or under notice of termination" - but didn't.
Certainly not conclusive and (as is obvious) I'm not a lawyer ... but I was merely giving my opinion as to how I'd be happy to act if I found myself in your shoes.

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Replying to Hugo Fair:
By SteveHa
03rd Mar 2021 09:41

Hugo Fair wrote:

... which would have been the precise opposite of the primary intention of the scheme (to save jobs).

I suspect that this must be considered. Regardless of who gave notice (employee or employer), CJRS would not be used to save the job.

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By Wanderer
03rd Mar 2021 11:13

Thanks to all that have contributed so far.

Extending Hugo's argument, for which I'm grateful, is there an interpretation that
"a day upon which their employee- (a) is on notice of termination"
means that this relates to the employer giving notice to the employee, as the employee is 'on notice' and in the case of a resignation it is the employer who is 'on notice'?

Having said that the HMRC guidance (I know, I know!) here:-
https://www.gov.uk/guidance/check-which-employees-you-can-put-on-furloug...
Says

HMRC wrote:
For claim periods starting on or after 1 December 2020, you cannot claim for any days on or after 1 December 2020 during which the furloughed employee was serving a contractual or statutory notice period for the employer (this includes people serving notice of retirement or resignation).
so, with this in mind, I think I'm not going to claim.
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Replying to Wanderer:
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By Hugo Fair
03rd Mar 2021 12:08

Probably wise to be cautious, since HMRC are happy to point to GOV.UK 'guidance' (although only when it suits them to do so). However, in typical mixed-message style, the GOV.UK quote is from a section with the title "If you’ve made your employees redundant"!
It is of course quite possible that the text was written by a work-experience temp who had no idea of any difference between redundancy / retirement / resignation.

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