Thousands of people could miss out on furlough payments through the Coronavirus Job Retention Scheme because they started new jobs in the past month.
Only those who were in employment before 28 February are eligible for the scheme; people who changed jobs after this date will not be paid under the plan.
Telegraph Money has claimed that Treasury officials are looking into ways to help people who were caught between jobs in March, but no details have so far emerged. The Treasury did no confirm any such plans with Personnel Today.
The reason for the 28 February cut-off was to prevent fraud – February was the last full month before the lockdown, so the Treasury used the month to gauge people’s salaries when formulating the job retention scheme.
Treasury officials were said to accept that any cut-off date would have serious implications for people between jobs, but have taken the view that not every business or individual job in the country would be saved.
A Treasury spokesman told the Telegraph: “Obviously it’s important to have proof that individuals are connected to the firms that are furloughing them.”
But when asked by Personnel Today about the possiblity of rethinking the rules, an official simply said: “The Coronavirus Job Retention Scheme is aimed at those who would otherwise be unemployed as a result of coronavirus.
“It allows for those who were on the payroll of a company on 28 February but subsequently left to be put back on payroll and furloughed.
“Decisions around whether to offer to furlough someone are down to the individual company.”
As this implies, one route of escape from the loophole is for people’s previous organisations to re-employ them, then furlough them, so that they can receive payments, but few firms so far have agreed to do this.
MPs, including shadow chancellor John McDonnell, have urged chancellor Rishi Sunak to act rapidly to help. Liberal Democrat leader Ed Davey said people were being unfairly “hung out to dry”, with “their dream jobs turning into nightmares”.
BBC News spoke to one woman whose plight was highly representative of the position of several thousand people throughout the UK.
Natalie Greenway, 24, left a job in retail management to start a new role as a customer services manager at a call centre on 16 March.
Greenway, from Burbage, Leicestershire, said: “I got the call from my company saying ‘we’re so sorry, we can’t furlough you’.
“They were really sympathetic and offered to keep me on the books unpaid so I could have a job to go back to.
“I’m staying on the books, I’m not entitled to jobseekers as I am employed.”
The Telegraph highlights the case of Jo Burton, 34, from Kent, who works in events management – among sectors worst affected by the Covid-19 outbreak. She moved jobs at the beginning of March but was made redundant within a week.
“When the government announced its job retention programme my new boss offered to hire me and put me on it straight away, but it then turned out I wasn’t eligible,” she told the newspaper.
Simmons & Simmons employment partner Olly Jones, said the loophole was “something the government was very much aware of at the time its guidance was produced”.
Jones added that what is being referred to as a loophole was “intended as an anti-fraud measure to avoid, in particular, companies employing friends and family and immediately furloughing them. It remains to be seen whether ministers will bow to the pressure to change the position with the significant additional costs and potential for abuse such a change would bring.”