It has been confirmed that employers can claim under the Coronavirus Job Retention Scheme (the Scheme) in respect of employees that were transferred from a previous business in line with the Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE), even if the transfer took place after 28 February 2020.
The purpose of TUPE is to protect the rights of employees if the business, or part of the business, in which they are employed changes hands, as the “new” employer effectively steps into the shoes of the “old” employer. The original HMRC guidance on the Scheme suggested that employees who had transferred under TUPE to a new employer after 28 February would not be eligible to be furloughed. Updated guidance clearly addresses this point meaning that employees who were on the payroll of one business on 28 February but transferred under TUPE to another business after 19 March 2020, are eligible for the Scheme.
This clarification will come as much-welcomed relief to employers taking on the financial demands of a new business or service in the midst of the coronavirus pandemic. It may also be the case that they take on already furloughed employees, in which case the transferor would claim under the Scheme for the pre-transfer period of furlough and the new employer would claim for any period of furlough post-transfer, subject in all cases to the minimum 3 week period of furlough - although the practicalities of such claims are as yet unclear.
A new employer is eligible to claim under the CJRS in respect of the employees of a previous business transferred after 19 March 2020 if either the TUPE or PAYE business succession rules apply to the change in ownership.