Outsourced Payroll Specialists

Coronavirus Job Retention Scheme: Guidance on Notice Pay

Guidance for the Coronavirus Job Retention Scheme (CJRS) was updated again on 17th July 2020. This time, there was one change made in two pieces of guidance and it’s an important one. It’s all to do with notice periods.

The employee and employers Coronavirus Job Retention Scheme Guidance now clarifies that notice periods being served by furloughed employees includes contractual notice periods.

This means that an employer can make a claim under the CJRS for an employee serving a notice period, whether that be a statutory one or a contractual one.

However any pay that is paid for a notice period can only be reclaimed under the CJRS for an employee who is serving their notice period. This excludes any payment made to a leaving employee in lieu of notice.

 

Statutory versus Contractual Notice 

At a time when employers may have to look at this, it is important to be clear on the difference between the two types of notice period.

Statutory Notice

This is the minimum amount of legal minimum notice that an employer can give an employee.  This has not changed as a result of the COVID-19 pandemic.  The employer must provide the employee with:

  • One week’s notice (when employed for a month or more)
  • Two weeks’ notice after two years of continuous employment
  • Three weeks after three years of continuous employment
  • And so on up to a ‘cap’ of 12 weeks

Employees must give the employer at least one week’s notice when employed for a month or more.

 

Contractual Notice

However, it could be that the contract of employment specifies for a longer notice period.  For example, the contract may specify that three months’ notice will be given. As the employer and employee have mutually-agreed to this, this is the notice period.

For more information visit the guidance on the Advisory, Conciliation and Arbitration Service (ACAS) Website for this important employment law consideration.

 

There are therefore two aspects which employers will want to consider:

  1. Statutory versus contractual notice
  2. Whether the notice period is served (CJRS claim) or a payment is made in lieu (no CJRS claim)

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