CPA Bulletin

www.cpa.uk.net CPA Bulletin > May 2020 49 For new employees who have joined a company since the 28th February, where do they stand under the Job Retention Scheme? The Government widened the criteria for employees who would qualify for the Job Retention Scheme. Originally, this only applied to those who were employed up until the 28th February. Now, this would apply to those who were employed up until the 19th March. For those employees who still do not qualify under the extended scheme with their current employer, may contact their former employer who had made the employee redundant, or they stopped working for them on or after the 19th March, then their former employer can effectively ‘re-employ’ them. The former employer can then place them on furlough and claim for their wages through the scheme. q A Q&As: 2 We have supplied an overseas customer with plant under the Model Conditions. The site has been put into ‘lock-down’, and the customer is claiming ‘Force Majeure’. Where do we stand? The position with hiring to customers/sites which are overseas can complicate the situation. There is no ‘force majeure’ clause within the Model Conditions, which govern the contract between you and your overseas customer. If you agreed to a suspension of the terms, which is what your customer is proposing under Force Majeure, would only confuse matters, i.e. who is responsible for the plant if it was damaged or stolen during this time. I would always avoid quoting legal clauses; however, you can refer your customer to clause 35(a), which states English Law and Jurisdiction would apply if the site was outside of the UK and would apply should a dispute ever arose. As to the rate you would charge during the lock-down period, then this is a commercial decision for you to reach. You are entitled to charge two-thirds of the hire rate as per clause 25 of the Model Conditions, or you may prefer to reach a compromised hire rate - which satisfies both parties. q A The Job Retention Scheme (JRS) was introduced by the Chancellor to assist companies in retaining staff, which previously had meant them being made redundant as a result in the downturn in business The JRS allows companies to claim 80% of employee’s wages who are placed on furlough (temporarily laid-off). The JRS limits an employee’s wage claim to £2,500 per month. This equates to £30,000 per annum, or for weekly wage staff to £576.92 per week, or £2,307.69 per 4-week period. From information received by the Department of Business, Energy, and Industrial Strategy (BEIS), the scheme’s policy is that employees must be placed on furlough for a minimum of 3 weeks, to (currently) a maximum of 3 months. During this time, the employee is not permitted to work, but can complete / continue any training necessary that has already begun. The JRS encompasses apprentices too. The Government also announced that they will now cover the employer’s national insurance and minimum auto-enrolment pension scheme contributions. The scheme will begin accepting applications from companies on the 20th April, with payments to be received by companies within 6-working days after the application has been processed. We have circulated a generic furlough letter which members can use for staff furloughs. q A I have heard that the Job Retention Scheme will end on the 31st May. Can you shed any light on why that is? The Job Retention Scheme (JRS) was launched as a temporary scheme by the Chancellor and was intended to run from the 1st March until the 31st May. However the Government has now extended this to the 30th June. Subject to the impact the Coronavirus has had, will dictate in part on how the Government proceeds with the JRS after this extended date. q A