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Coronavirus Job Retention Scheme (CJRS) & Furlough - Top Tips and Guidance


Communications with employees

Should employers be asking employees to return phones/laptops/cutting off access etc. to ensure employees are not working whilst furloughed, or is such extreme action not required to protect the employer’s position?

Most employers are pretty relaxed about this, assuming that HMRC will not be too forensic when it comes to paying out on applications, but we have created some wording (for furlough communications to employees) that we believe might assist in any future HMRC audit process.

“Whilst you will be allowed to retain intranet/email access and your mobile phone, this is to allow us to maintain contact with you, and for you to feel a continuing part of the business when furloughed. Under the principles of the CJRS, you are not expected or allowed to work for us when furloughed, and we ask that you follow this instruction, and respect this please to assist us in including you in the CJRS.”


Determining correct start date for furlough period

If an employee decided two weeks ago not to come into work because they were frightened and is now absent unpaid, and we put this person on furlough, does the furlough have to start from the first day of their absence or the day we decide to furlough, or is it up to us as a business?

There is no guidance on the start date for the furlough in these circumstances. The individual has not attended work due to their own fear, not because of a reduced workload. HMRC have the right to retrospectively audit claims once submitted. Therefore, a cautious approach would be to avoid backdating, but ultimately it is up to the business – the furlough scheme does apply retrospectively from 1 March.


Employees at start or end of contract

The government guidance states that employees hired after 28 February 2020 cannot be furloughed or claimed for in accordance with the scheme. So what does hired mean?

There is no definition of the word “hired” in law.

Our best guess is that this means anyone with a start date of post 28 February 2020 cannot be designated as furloughed, but that then begs the question how can you treat them. This may be unintended, and has not really been thought through. If an employer makes a genuine offer of employment to someone before this date, and they accepted that offer, with an agreed start date of post 28 February 2020, then why should they not be treated like all other employees.

So the “answer” appears to be to ask them to agree to unpaid leave, on the basis that if they do so, the employer will at least “designate” them as furloughed (without committing to immediately pay 80% wage payment in line with other employees) and that when an application is made under the scheme they will be included in the hope that they are accepted as eligible. The employee should be told that the alternative is an immediate termination of employment with PILON (based on usual salary and benefits).

Can you furlough an employee who is on notice, and is on garden leave until the termination date?

Probably not would be our view, less so if this arrangement is covered under a Settlement Agreement.

Can employees who are working their notice be furloughed?

If an employee has resigned, or been dismissed, and is working during their notice period, they can be furloughed if work is no longer available for them to do. The position may, however, be different if the employee is on garden leave for the notice period and not required to work.



Can employers agree with employees who are furloughed that they will not accrue holiday during the period of furlough?

No. Holiday continues to accrue whilst employment is continuing and you cannot contract out of the Working Time Regulations 1998 on this point.

Can annual leave be taken during furlough?

The government guidance, including the updated guidance issued on 4 April, is currently silent on this point and there are differing views as practitioners try to work out the answer for themselves.

ACAS guidance on whether holidays can be taken during furlough appears contradictory. Existing case law on lay-off (a similar concept to furlough) suggests holidays could be taken during furlough.

However, employers having to pay employees holiday pay during a period when the government is helping them to avoid paying wages might seem counterproductive.

It may be that employers would want employees to take some holiday during a period of furlough to avoid a glut of holiday absences once the scheme has ended, however until there is more clarity from the government there is a risk employers could be penalised for requiring employees to take annual leave during furlough.

There are risks to either approach, but for the moment, the best advice is to ensure that employees who are furloughed do not take any holidays until they have been furloughed for at least 3 weeks.

Can furloughed employees be required to take bank holidays as part of their leave entitlement?

There is uncertainty on this question, again due to a lack of clarity in the government guidance. In our view, where bank holidays are not ordinarily worked in a business, i.e. all employees have the bank holiday off, then they would not accrue for an employee who is furloughed, although such employees might be entitled to 100% of their normal pay for that day. This is on the basis that a furloughed employee will be off work on any given bank holiday during their furlough period, and paid at 80%. Beyond 20% pay (which they may be entitled to) they do not lose anything by being furloughed on a day which is a bank holiday. Employees working for a business in which bank holidays are not ordinarily worked would not be able to switch a bank holiday to be a working day, and then take a lieu day. So it seems to us in the absence of further government guidance that there would be no alternative to taking bank holidays during furlough.



For employees whose pay varies, we currently calculate their average ‘normal pay’ on a 12 week reference period. When furlough ends, should we count the furlough period or look at the 12 weeks before it started?

There is currently no government guidance on this, but normally periods where no work is carried out (where no pay is received) would be omitted from the reference period to avoid skewing the calculation. Also, the objective of the reference period is to ensure that the average pay calculation is representative. Our view, subject to further guidance, is therefore that you would ignore the furlough period and look at the 12 weeks before it started. However, please note that, for holiday pay purposes, the reference period will increase from 12 weeks to 52 weeks from 6 April 2020 (or the duration of the period of employment if less than 52 weeks).

Do we take into account contractual payments such as car allowance when calculating 80% of pay for furlough purposes?

There is no specific government guidance on this point. The only guidance is that commissions and bonus are explicitly excluded from the calculation and cannot be reclaimed. Because car allowance is a contractual payment, our view (subject to further detail being released) is that contractual payments such as car allowance should be taken into account.

Should furlough pay include the national minimum wage increase on 1 April?

The Government Guidance to Employers states that individuals are only entitled to the National Minimum Wage (NMW) for the hours they are working under minimum wage rules. This means that furloughed workers (who are not working) can be paid the lower of 80% of their salary even if, based on their usual working hours, this would be below their appropriate minimum wage.

As such, although the NMW increased as at 1 April 2020, that increase only needs to be applied when the employee returns to work from furlough.



The reduced furlough pay will result in reduced employer pension contributions. Can I reduce employer pension contributions without consultation?

Many employers have been imposing salary reductions, and designating employees as furlough, without consultation – both of which will result in reduced employer pension contributions. The issue is not so much around the lack of consultation, which might be considered as reasonable in any event given the extreme circumstances. The issue for employers will be that on return to normal working, where no consultation took place that might have resulted in consent to the salary reduction/furlough, the employee may well claim for the salary reduction/reduction in pension contribution.


Statutory Sick Pay (SSP) & ‘Shielding’

Can those who live with individuals in the shielding category be furloughed or be paid SSP?

An employer can furlough an employee who needs to stay home with someone who is shielding if they are unable to work from home and you would otherwise have to make them redundant.

If someone is currently shielding and off work and not yet on furlough, should they be receiving SSP?

Yes. Emergency legislation has been passed to enable SSP to be paid to anyone who is sick, self-isolating or shielding in line with government guidance.

SSP is available from day one of the absence (instead of day 4, which is usual). Up to 14 days’ worth of SSP can be reclaimed by the employer, through HMRC.

If an employee who is shielding is to be placed on furlough, when would the furlough start from - the end of the SSP entitlement?

Shielding employees can be furloughed. This is confirmed in the government guidance.

There is no guidance on the start date for the furlough in these circumstances, but HMRC will have the right to audit claims for furlough pay retrospectively once submitted. Therefore, a cautious approach would be to avoid backdating the furlough start date and confirm the start date of furlough as the end of the SSP period. This approach would be consistent with the government guidance for furloughing those who have been on SSP.


Volunteering or taking another job on furlough

Can furloughed employees volunteer?

Furloughed employees can do this as long as they don’t also provide services or generate revenue for the employer that has designated them as furlough. Updated guidance says employers can support employees in findings new work or volunteering opportunities whilst they are furloughed if this is in line with public health guidance (i.e. they have not been told to shield or self-isolate).


Employees with caring responsibilities

Employees who are unable to work because they have caring responsibilities resulting from coronavirus (COVID-19) can be furloughed. For example, employees that need to look after children can be furloughed.


If you have any questions after reading our guidance in this blog please do contact our employment team who will be able to give you more specific advice. 

Disclaimer: Anything posted on this blog is for general information only and is not intended to provide legal advice on any general or specific matter. Please refer to our terms and conditions for further information. Please contact the author of the blog if you would like to discuss the issues raised.