Is there a cap on the number of employees on Flexible Furlough?
Be careful, there is now a cap on the number of employees you can have on furlough at one time.
The number of employees you can claim for in any claim period starting from 1 July cannot exceed the maximum number of employees you claimed for under any claim ending by 30 June 2020. So this cap is going to be specific to each employer.
It may catch out, in particular, employers who had been rotating employees on furlough.
Related FAQs
On 7 May the Government published guidance on how contracting parties can act responsibly in order to assist the effort to deal with Covid-19. The guidance seeks to persuade contracting parties to act reasonably and recognise the impact of Covid-19 on contractual counterparties. This will continue to be relevant as business begins to emerge from lockdown.
On 30th April 2020, the CMA issued a guidance note setting out its views about how the law operates in relation to refunds.
Where a contract is not performed as agreed, the CMA considers that in most cases, consumer protection law will generally allow consumers to obtain a refund.
This includes the following situations:
- Where a business has cancelled a contract without providing any of the promised goods or services
- Where no service is provided by a business, for example because this is prevented by Government public health measures
- A consumer cancels, or is prevented from receiving any services, because Government public health measures mean they are not allowed to use the services.
In the CMA’s view, this will usually apply even where the consumer has paid what the business says is a non-refundable deposit or advance payment.
This positon reflects the CMA’s previous guidance which they had issued in relation to the requirement of fairness in consumer contracts under the Consumer Rights Act 2015, which was that a clause in a contract that gives a blanket entitlement to a trader to cancel a contract and retain deposits paid is likely to be unfair, and therefore unenforceable – it would be unfair to a consumer to lose their deposit if the contract is terminated without any fault on their part, and if they had received no benefit for the payments made.
The CMA’s latest guidance therefore confirms their view that the Covid-19 outbreak does not change the basic rights of the consumer, and that they should not have to pay for goods or services that they do not receive.
The Commission has provided guidance as to measures which Member States can introduce without notification. These include:
- Measures which apply to all businesses within a Member State (for example the furloughing measures introduced by the UK Government)
- Measures providing support direct to consumers
- Measures which are already exempt from the notification requirement (discussed further below).
To respond to the crisis the European Commission has also issued a temporary framework to provide a basis for emergency aid to be notified for approval. The framework is initially in place until 31 December 2020. The Commission continues to keep this under review and has twice widened its scope to allow more types of aid to be notified. The type of measures covered include:
- The provision of guarantees (including guarantees for 100% of loans)
- The provision of loans at low interest rates, at zero interest rates or subordinated to senior debt
- Measures to support liquidity needs or to alleviate difficulties caused by the current crisis
- Measures to recapitalise businesses
- Measures to assist sectors hit particularly hard by the current crisis (eg transport)
- Measures targeted at COVID-19 such as research and development or production of products related to tackling the virus
The Commission has approved a UK Government “umbrella” notification to allow UK public authorities to adopt the measures permitted by the Commission framework. Therefore public authorities in the UK can use the Framework without notifying individual measures or schemes to the Commission.
Charities can also take advantage of the existing measures the Government has already put in place including deferring their VAT bills, paying no business rates for their shops next year and furloughing staff where possible with the Government paying 80% of their wages under the Coronavirus Job Retention Scheme – see our People and Employment FAQ’s and our Premise and Property FAQ’s.
CBILS is made available through the British Business Bank’s 40+ accredited lenders and partners, which are listed on their website (https://www.british-business-bank.co.uk/ourpartners/coronavirus-business-interruption-loan-scheme-cbils/accredited-lenders/).
Businesses should initially approach their own lender and only consider other lenders if they are unable to access the finance they need. Note, not every accredited lender can provide every type of finance listed.
Some banks/lenders are not included in the list of accredited lenders which appears to mean that they cannot provide support through the Scheme. We understand from the British Business Bank that further lenders are applying to be accredited but that this may take a little time to process. If the provider of your senior debt is not on the accredited list you should consider approaching the bank which provides your day to day account banking services.
If you wish or need to access the Scheme via an alternative funder the process may take longer as usual on-boarding and KYC processes will need to be undertaken.