Furlough and job retention scheme grants: clarity on notice pay at last

The Government has updated its guidance and confirmed that employers can continue to claim a grant for the wages of a furloughed employee who is serving a statutory or contractual notice period.  

The guidance has been clear that grants from the coronavirus job retention scheme cannot be used to fund redundancy payments. However, the position regarding notice pay has, until now, been unclear. For much of the time the guidance has been silent on this point. The Government amended the guidance earlier this month to say that employers can claim a grant for an employee serving a statutory notice period but it did not mention a contractual notice period. 

The updated guidance puts the position beyond doubt. Employers can claim a grant where an employee is furloughed during their notice period. This means the scheme can be used to help fund notice pay. However, if an employer terminates employment immediately and makes a payment in lieu of notice, it will not be able to claim a grant to cover the payment in lieu of notice.