CONFIRMED: Government allows firms to rehire and furlough staff who left for other jobs
After a campaign by MoneySavingExpert.com founder and chair, Martin Lewis, the government has agreed to change its Coronavirus Job Retention Scheme guidance, in order to clarify that firms can rehire and furlough those who left for other jobs, 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), where they don’t work, and the state finances 80% of their salary up to £2,500. Employers can top this up to 100%, but are not required to. Full information is in the MSE coronavirus employment rights guide.
Official guidance has always stated that they can rehire and furlough staff they’d made redundant after 28 February. Earlier this week, 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 the 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 following statement, and to change the official guidance as soon as possible.
A government spokesperson said: “The Coronavirus Job Retention Scheme is aimed at those who would otherwise be unemployed as a result of coronavirus. It allows for those who were on the payroll of a company on 28 February but subsequently left to be put back on payroll and furloughed.
“This includes those who have resigned to start a new job after February 28. They may return to their old employer but decisions around whether to offer to furlough someone are down to the individual company.”
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 the 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-recruit someone and furlough them, they can put them on 80% of their 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 have simply been unwilling, and sadly the rules have given them full discretion, leaving those affected 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 the coronavirus can be rehired. This includes both those who didn’t start the new job, and those who did, but now face redundancy because they were new starters after 28 February, which means they can’t be furloughed.
“Though to be clear, where the unemployment isn’t caused by the 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.”