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COVID-19: Let us know what you think of the Government's unprecedented support for workers...

Steve Bridger

Good evening Everyone.

In response to the Chancellor’s unprecedented package of financial measures to support workers, Peter Cheese has made the following statement:

CIPD welcomes unprecedented support for workers and urges employers to hold their nerve while funds arrive

As Peter says...

“The challenge now is the speed with which employers can access these funds to avoid redundancies being made, given it could be the end of April before they become available.

“Employers need to hold their nerve in this challenging time and make every effort where they can to retain their staff while waiting for the job retention funding to come through. Concerns over immediate cashflow and payroll challenges should be met by the business loans announced by government, which should be available in a matter of days."


I've lost count of the number of times I've uttered the word "unprecedented" in recent days. My head is spinning.

Please do let us know what you think of the latest Government announcement... and share your thoughts and concerns below.

Finally, I just wanted to say that all of us at CIPD would like you to know we stand with you at this time.

Parents
  • In respect of the updated guidance on the CJRS and the question of compulsory commission. I am unclear on whether this means that you can include the compulsory commissions you have paid historically when calculating the 80% [so either on the set month or average basis] or that you can include any compulsory commission that was due for payment in for example April 2020 when calculating the 80% [subject to the £2,500 cap] for that month.

    Does anyone seen any further guidance on this point?
  • in reply to Mel

    Treat as you would any other "variable" payment.

    The additional rules that are being set are clearly not cancelling previous practices or procedures but are exceptional "on top" or "variation" to existing statutory requirements.

    If someone is paid by commission only, or as a pre-determined part of their salary, that is a contracted agreement, therefore it is (self evidently) a "compulsory" payment that must be made to them to fulfil their contract, but it is not a fixed sum, (and might even be £0.00 if no commission has been earned in a given month).

    Thus the relevant sum is calculated for furlough as an average in the same way as it, or any other variable amount, would normally be for leave or other authorised absence.

    The "optional" payment of commission (or other "bonus") "gifted" at the employer's discretion however, being payment of a sum not part of the pre-agreed remuneration for the employee's role, would not be a compulsory payment and so is excluded from the subsidy.

    What has changed?

    Any other interpretation would mean that someone on a commission only or part-commission contract (thus earning no commission during the furlough period) would be entitled to no payment for commission going forward during their absence, so why would there be any necessity for HMRC to say that this payment (of nothing) can be included? (The payment of commission already earned NOT being payment for the furlough)

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  • in reply to Mel

    Treat as you would any other "variable" payment.

    The additional rules that are being set are clearly not cancelling previous practices or procedures but are exceptional "on top" or "variation" to existing statutory requirements.

    If someone is paid by commission only, or as a pre-determined part of their salary, that is a contracted agreement, therefore it is (self evidently) a "compulsory" payment that must be made to them to fulfil their contract, but it is not a fixed sum, (and might even be £0.00 if no commission has been earned in a given month).

    Thus the relevant sum is calculated for furlough as an average in the same way as it, or any other variable amount, would normally be for leave or other authorised absence.

    The "optional" payment of commission (or other "bonus") "gifted" at the employer's discretion however, being payment of a sum not part of the pre-agreed remuneration for the employee's role, would not be a compulsory payment and so is excluded from the subsidy.

    What has changed?

    Any other interpretation would mean that someone on a commission only or part-commission contract (thus earning no commission during the furlough period) would be entitled to no payment for commission going forward during their absence, so why would there be any necessity for HMRC to say that this payment (of nothing) can be included? (The payment of commission already earned NOT being payment for the furlough)

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