Furlough scheme extended until October 2020

Wednesday 13 May 2020

Yesterday the Chancellor Rishi Sunak announced the Coronavirus Job Retention Scheme (Scheme) will be extended for a further four months until the end of October 2020.

As we currently understand the position, there will be no change to the way in which the Scheme currently operates until the end of July, however, it is anticipated that from August:

• the amount of salary that can be reclaimed will reduce from 80% to 60%;
• employers will have to top-up some of the grant in order to access the Scheme; and
• the concept of ‘part-time furlough’ will be introduced.

The Chancellor said:

“Our Coronavirus Job Retention Scheme has protected millions of jobs and businesses across the UK during the outbreak – and I’ve been clear that I want to avoid a cliff edge and get people back to work in a measured way. This extension and the changes we are making to the scheme will give flexibility to businesses while protecting the livelihoods of the British people and our future economic prospects.”

We are waiting for further guidance from the government on how the Scheme will change, but it is clear that the focus has now shifted to a gradual return to work following the easing of the lockdown restrictions.

However, pending publication of the new guidance, employers are advised to review the furlough letters that they will have issued staff when the Scheme was launched. At present it is unclear whether the extension of the Scheme and potential reduction in the grant will necessitate new furlough agreements between employers and furloughed staff.

If you have any questions about the extension of the Scheme, please email or call our Employment Law team today on 0113 207 0000.