The Coronavirus Job Retention Scheme
On 20 March 2020, the Government introduced the Scheme to help employers severely affected by coronavirus (COVID-19) to retain employees. Employers can ‘furlough’ their staff and apply for a grant from the Government to cover up to 80% of each person's usual monthly wage, up to a max of £2,500 a month. The Scheme has been extended several times and is now due to end on 30th September 2021.
Am I eligible to be furloughed?
The criteria outlining who is eligible to be furloughed has changed throughout the course of the Scheme. You can check whether you are currently eligible on the government’s website here. The guidance confirms that, subject to meeting all the eligibility criteria, agency workers, those on fixed-term contracts and apprentices can be furloughed.
Essentially, for claims ending on or before 30 April 2021 you must have been employed on 30 October 2020, and as long as your employer must have has made a PAYE Real Time Information (RTI) submission for you to HMRC between 20 March 2020 and 30 October 2020 notifying a payment of earnings. You don’t need to have been furloughed under the CJRS previously.
For claims from May 2021 onwards, you must have been on your employers PAYE payroll on 2 March 2021 and an RTI submission must have been made to HMRC between 20 March 2020 and 2 March 2021 notifying a payment of earnings. Employers do not need to have previously claimed for you before 2 March 2021 to claim for periods on or after 1 May.
You can be on any type of contract, including a zero-hours, fixed-term or temporary contract. Which? Legal stresses it’s important that you and your employer have agreed to you being furloughed and that the agreement is recorded in writing. This could be done by email or through a letter. You will not be eligible to be furloughed if you started working for your employer on or after 3 March 2021.
Can I ask to be furloughed?
Yes, but - ultimately - it is your employer's decision as to which employees it furloughs.
Employers are under no obligation to sign up to the scheme or continue keeping people on furlough; they are within their rights to make people redundant or dismiss them for other potentially fair reasons. However, the scheme has been made with the aim of encouraging employers to keep as many staff as possible.
What can I do for my employer whilst I am furloughed?
You cannot do any work for your employer whilst you are on furlough – even sending emails for work purposes, but you can train with them if asked to do so (this assuming your employer does not use the training to generate revenue in any way). Please see ‘Can my
employer furlough me more than once?’ below.
Can I work elsewhere?
You can work for another employer, providing your contract of employment does not prevent you from doing so, or your employer consents. However, you will not be able to work for any business that is associated with or linked to your employer. You can also do voluntary work, providing this is not for your employer or a linked or associated organisation.
What will I be paid if I am furloughed?
The government is currently reimbursing employers 80% of people’s wages, up to a maximum of £2,500 a month for each furloughed employee. The £2,500 is subject to income tax and national insurance deductions.
Your employer should include
● Regular wages
● Non-discretionary payments for hours worked, including overtime
● Non-discretionary fees
● Compulsory commission payments
● Piece-rate payments.
Your employer won’t be allowed to include:
● Payments made at the discretion of the employer or a client including payments such as tips
● Discretionary bonuses
● Discretionary commission payments
● Non-cash payments
● Non-monetary benefits, such as benefits in kind (a company car, for example) and salary sacrifice schemes (including pension contributions) that reduces an employees’ taxable pay.
The 80% salary calculation will be worked out differently depending on the way you’re paid. You can find out more on the government website.
The level of the government grant will change so that your employer will need to also start contributing, as follows:
In July 2021 your employer will be required to contribute 10% towards furlough pay, with the government putting in the other 70%;
From August 2021 your employer’s contribution will increase to 20%, with the government’s reducing to 60%.
Is my employer obliged to top up 20%my wages to 100%?
Your employer can decide to pay the shortfall, but they do not have to. Even if you will end up earning less than the National Living Wage or minimum wage once you receive 80% of your pay. Instead, you might be eligible for Universal Credit payments.
As the scheme has now been extended to 30 September employers who had previously been willing to top up wages to 100% may be more reticent to do so. If you find yourself in this position, your employer would need to get your consent to reduce your pay to 80%.
If your employer doesn’t make up the 20% shortfall, or they are no longer willing to top up your salary, and they don’t get your consent to
the reduction in your pay, you will likely have claims for breach of contract and unlawful deduction of wages. The type of claim you may
have will depend on whether you continue to be employed.
Speak to one of our specialist employment lawyers to determine what the right course of action is for you. Please note the deadline to issue any unauthorised deduction of wages claim in the Employment Tribunal will usually be three months less one day from the date of the unauthorised deduction or from the last in the series of deductions. The deadline for breach of contract claims (which you cannot lodge in the employment tribunal whilst employed) is slightly different; it is three months less one day from your last day of employment. Prior to lodging your claim you would in any event need to commence ACAS Early Conciliation.
Can my employer furlough me more than once?
Since 1 July 2020 employers have been able to flexibly furlough staff i.e. to bring employees back to work on a part time basis if it is safe to do so and be furloughed for the rest. There is no set minimum period that you must be furloughed for and it could be on any basis, e.g. on rotation (a week at work followed by a week on furlough), or any combination of part-time days/hours and furlough each week. Any flexible furlough arrangement must be agreed with you and recorded in writing.
What is the position if I have more than one job?
Jobs with different employers are treated separately. This means you could be furloughed from one or more jobs.
What if I am sick or I am told to self-isolate?
The eligible employees government guidance (see link below) is not entirely clear. Whilst it confirms that if you become sick while on
furlough your employer can decide whether to put you onto SSP or keep you on furlough, it also says furlough is not intended to cover short-term absences due to sickness. However, it goes on to say an employee can be furloughed for ‘business reasons’.
The issue for employers making a claim is that they can only do so if it is in respect of employees within the scope of the CJRS, i.e. as a result of the health, social and economic emergency caused by the pandemic. Here is our interpretation of the guidance:
If you are on furlough and become sick:
It is up to your employer to decide whether to put you onto SSP or keep you on furlough.
If you are under a flexible furlough arrangement:
There is no specific guidance on how to handle a situation where a sick employee is working part of their working week and furloughed for the remainder.
If you are under a flexible furlough arrangement and you fall sick or are told to isolate when you are due to be working:
You should be paid SSP or company sick pay as normal.
The position is more complicated where you are sick and you are due to go back on furlough - you cannot be on sick leave and furloughed at the same time. It is not entirely clear from the government guidance whether allowing you to be placed on scheduled period of furlough (even though you are still sick), would be considered an abuse of the scheme. The guidance says that short-term illness or self-isolation should not be a consideration when deciding whether to furlough you. On the other hand, the guidance also says that if your employer wants to furlough you for business reasons and you are currently off sick, they may be able to do so.
It’s been reported that HMRC’s furlough helpline has said their interpretation of the guidance in these circumstances is that the
employee should stay on sick leave for the whole period.
If you have been told to self-isolate:
If you are self-isolating you may be eligible to receive SSP. Whilst the guidance does not explicitly exclude the possibility of you being furloughed, it does say that self-isolation should not be a consideration when deciding whether or not to furlough someone. As mentioned above, an employee can be furloughed for ‘business reasons’. The guidance also says employers ‘can furlough employees who are clinically extremely vulnerable or at the highest risk of severe illness from coronavirus’.
Ultimately it is up to your employer to decide whether or not to furlough
you if you are told to self-isolate.
Can I be furloughed if I am ‘shielding’?
If you have been advised to shield you are entitled to SSP. However, it is possible for your employer to end SSP and put you on furlough.
What happens if I am unable to take my annual leave because of COVID-19?
You continue to accrue holiday whilst you are on furlough.
On 27 March 2021, the Government passed emergency legislation to protect workers from losing their statutory holiday entitlement. If it has not been reasonably practicable for you to take your basic entitlement of your statutory annual leave (i.e. the 4 weeks’ basic entitlement) due to COVID-19, you must be able to carry that unused leave over into your next two leave years. Your employer can,
by giving appropriate notice, require you to take your leave at, or by, certain times, even if you are on furlough.
You are entitled to be paid your normal holiday pay rate for any holiday you take whilst on furlough.
Can my employer still decide to make me redundant?
Yes it can – while you are furloughed or afterwards, and your redundancy rights will not be affected. If you are an employee and have more than two years’ service you will be entitled to a statutory redundancy payment. You will also have the right to challenge the decision to make you redundant in the Employment Tribunal (if you believe it was unfair).
Will furlough leave affect my other employment rights?
Employees still have the same protections whilst on furlough leave, including to SSP, parental rights, holiday and the right not to be unfairly dismissed (if they have over two years’ service).
Alternatives to Furlough Leave: Lay-offs and short-time working
In some situations, for example to help avoid redundancies, your employer might ask you to stop working for a while (a ‘temporary lay-off’), or work fewer hours (‘short-time working’). However, your employer needs a contractual right to do either of these things.
If you are laid off or put on short-time working you may be entitled to a statutory minimum ‘guarantee payment' of up to £30 a day for a max of five workless days in any three-month period. To be eligible for such a payment, you must have been employed continuously with your employer for at least one month, and not refused any reasonable alternative work.
You may be able to apply for redundancy and claim redundancy pay if you have been laid off or put on short-time working for four or more consecutive weeks, or six weeks within a 13-week period. There are other eligibility and notification requirements that need to be met before you can claim, so take advice to see if you qualify.