HMRC Confirms Employers Can Claim Notice Pay From CJRS

By Joanna Sutton

Senior Associate

There was originally some debate as to whether employers could use the Coronavirus Job Retention Scheme (CJRS) to fund their employee’s notice pay.

This was because of the wording of a Treasury Direction issued to HMRC dictating how the CJRS should be operated. The Direction stated that it was an ‘integral’ purpose of the CJRS to be used by the employer to continue the employment of employees.

Some commentators felt that this meant that it would not be possible for employers to claim for the cost of notice pay, since this would be as a result of the termination of employment, and so not in the spirit of the purpose of the scheme to enable continued employment.

However, this week HMRC has confirmed that it is possible to claim for notice pay of employees under the CJRS. The guidance is available here: Check which employees you can put on furlough to use the Coronavirus Job Retention Scheme

It is important to note, however, that a claim can only be made for notice pay under the CJRS if the employee remains on furlough leave for the duration of their notice period.

A claim cannot be made if the employee is to be paid in lieu of their notice period. It also remains the case that the CJRS cannot be used to fund redundancy payments.

Given the impact of coronavirus on the job market and the difficulty that many employees are likely to experience in finding new employment, there is currently a much greater risk of unfair dismissal claims being pursued.

It is therefore more important than ever to make sure that the correct processes are followed before terminating the employment of any member of staff.

For more information and to find out how we can help you, please contact our Employment Team on 0345 646 0406 or fill in our online enquiry form and a member of our Team will be in touch.