Coronavirus Job Retention Scheme Update for the Hospitality sector

25 June 2020

From 1st July 2020 the Coronavirus Job Retention Scheme (CJRS) will allow employees who have been previously furloughed to return on reduced hours, working for any amount of time and any shift pattern, with employers still able to claim the CJRS grant for the employees’ unworked hours, subject to a minimum claim period of one week. 

One key qualifying condition is that a CJRS claim must have been previously submitted for the employee in relation to a furlough period of at least 3 consecutive weeks any time between 1 March and 30 June 2020.

Flexibly furlough

Employers who ‘flexibly furlough’ employees under the new CJRS will need to agree this with them and keep a new written record of the agreement for the new furlough arrangement. This must include how many hours employees work and the number of hours they are furloughed (i.e. not working) and be kept for six years.

The aim is to get furloughed employees back to work, on a gradual basis where necessary, as operations are slowly built back up, where it is safe to do so.

The Prime Minister has now announced that changes to the two-metre social distancing rule will take effect from 4th July, allowing pubs and restaurants to re-open.  This is a move which will be warmly welcomed by the hospitality industry.  The two-metre rule will be relaxed to one metre, providing that mitigating measures are in place to reduce transmission.

The Business and Planning Bill will be introduced in the Commons this week and will include proposals to help businesses to sell food and drink in pavement cafes, beer gardens and other open spaces.  Pubs and restaurants will be very different from pre-lockdown when they reopen, erecting screens between tables, introducing table-service, using disposable menus or ordering via apps, but the reduction to the “one metre plus rule” will, it’s hoped, make this 4th July a true “Independence Day” for the hospitality industry.

There will, however, be a big learning curve for these businesses and their employees as we move towards the ‘new normal’ and there are a number of key aspects to consider.  Moving out of lockdown and re-opening for business will mean very careful management of the CJRS rules, particularly where employees return ‘part-time’.

The above, along with the complexities associated with calculating the claim and remaining compliant will mean that businesses must fully assess:

  • How to manage un-furloughing workers to maintain optimal operational performance and fairness to all employees
  • Potential phased customer activity and associated staffing levels from 4th July

In addition, employers must ensure that they gain agreement from their employees to a temporary variation to their terms and conditions of employment.

The overall message, however, continues to be that the Government will provide assistance to both employers and employees. They are urging businesses not to make permanent redundancies.

Find out more

If you have any queries, or would like to discuss your requirements for the next step, please contact:

Nigel Morris, Employment Tax Director, nigel.morris@mhllp.co.uk, Tel: 07718 340634

Richard Maitland, Employment Tax Partner, Richard.maitland@mhllp.co.uk, Tel 07711 373584

Stephanie Pote or Colin O’Kane, Senior HR Consultants, HRSolutions@mhllp.co.uk

The above guidance is provided for your information and is our summary of the latest position as we see it. You should seek appropriate legal and technical advice in relation to your own specific circumstances before acting on the above.

Please also note that Government advice is being updated on a regular basis.

If you are concerned about being impacted financially due to the Coronavirus, we are here to support you or if you require more specific advice on your situation and how the COVID-19 pandemic may affect your business. Reach out to discuss how we can help and view our latest advice here