Martin persuades Government to allow firms to rehire and furlough staff who left for other jobs
The Government has agreed to change its Coronavirus Job Retention Scheme guidance after a campaign by MoneySavingExpert.com founder Martin Lewis – it's now clarified that firms can rehire and furlough those who left their job for a new job which then fell through due to Covid-19.
Under the scheme, a firm can choose to put employees who were on the payroll on 28 February 2020 on 'furlough' (a bit like a standby mode) – that's where they don't work, and the state finances 80% of their salary up to £2,500/month. Employers can top this up to 100%, but are not required to. Full info is in our Coronavirus Employment Rights guide.
Official guidance has always stated that employers can rehire and furlough staff they'd made redundant after 28 February 2020. Earlier this month, Martin got confirmation that nothing explicitly prevented firms from doing the same for staff who'd left, and whose plans were then derailed due to coronavirus.
Yet without seeing this in black and white from officials, many employers said it couldn't be done. So after further discussion with Martin, HMRC agreed to provide MSE with the statement below, and to change the official guidance ASAP.
Martin: 'Now it's official – the rules do allow this'
Martin Lewis comments: "I'm grateful to the Treasury and HMRC for the official statement and agreeing this amendment to the guidance. Via the furlough scheme, the Government has outsourced an arm of the emergency welfare state to corporate Britain, and made it gatekeeper of this new form of wealth support. The hope is this will allow us to restart the economy quickly when we come out of lockdown.
"For that to work well, we need employers to take on a moral duty to deliver these responsibilities for the betterment of individuals and the economy. If they re-recuit someone and furlough them, they can put them on 80% of salary, and the state pays all that salary, plus national insurance and any pension contribution. There's no cost to the firm, though there may be a short-term cash flow issue.
"While I've heard many cases of firms furloughing those they had made redundant, those in need who left voluntarily have met a brick wall. Some firms are simply unwilling, and sadly the rules give them full discretion, leaving the new starters elsewhere nowhere to go. Yet others have good relationships with their former colleagues and have told them: 'We would if we could, but the rules don't allow it'.
"Well, now it's official – the rules do allow it, and it would be wonderful if they deliver. Employees who left after 28 February, having resigned for a new role that fell through due to coronavirus, can be rehired. This includes both those who didn't start the new job, and those who did but now face redundancy because as new starters after 28 February they can't be furloughed.
"Though to be clear, where the unemployment isn't caused by coronavirus – for example, someone who voluntarily left a job to take a few months off to travel the world – the rules don't allow them to be rehired in order to be furloughed.
"Overall, while this solution is far from a panacea for the issues facing many who started new jobs recently, it should help some. Yet it is only one small piece in the jigsaw, much more needs doing."
On Friday 17 April, new guidance was brought out on this and included the new phrase that rehire and furlough was for "those made redundant or stopped working for employer after [28 February] and prior to 19 March 20".
Martin was alerted to this by an employer who had been planning to help former stuff but couldn't as a result of the 19 March cut-off, and raised it in conversations with HMRC.
And as of Thursday 23 April, the latest guidance doesn't include this 19 March cut-off – saying that employees who were made redundant or stopped working for their employer after 19 March CAN be re-hired and furloughed as long as they were employed on 19 March and on the payroll on or before this date.
The Chancellor confirmed the change on Twitter
In a Q&A on Twitter on Friday, the Chancellor confirmed that firms could rehire and furlough workers who were on their payroll on 28 February 2020 but had subsequently left for any reason, although he said this was ultimately up to the companies themselves.
This is now in the Government guidance
On Sunday 6 April, the Government updated its guidance as promised.
In the guidance for employees, it now says:
"If you were made redundant or stopped working for your employer after 28 February 2020. Your employer can agree to re-employ you and place you on furlough. They'll still be able to claim a grant to cover 80% of your regular wages, up to a monthly cap of £2,500 if you were on your employer's PAYE payroll on 28 February 2020."
And in the guidance for employers, it now says:
"If you made employees redundant, or they stopped working for you on or after 28 February 2020, you can re-employ them, put them on furlough and claim for their wages through the scheme."
Success – old employer asked to do this by one employee, then proactively reaches out to others
One person sent Martin's furlough explainer video to the chief executive of their old employer, Kuoni, after their planned new job fell through. She was taken back on payroll and furloughed. We'll let that chief executive, Derek Jones, tell the full story:
PS: We'd be interested to hear how your old employer reacts to this. Sadly, we suspect the vast majority will say no, but we've had a few success stories, like Kuoni's, come in, so it is worth asking.
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