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Coronavirus Job Retention Scheme (Furlough Leave) – What you need to know! Updated 21.04.2020

Posted on 31st March 2020

Updated 21 April 2020

The Coronavirus Job Retention Scheme was announced on 20 March 2020 to provide security for employees over the coming months in light of the current crisis. The government had continued to release further details and updates to the scheme since then. The scheme provides a mechanism that allows businesses to retain employees without the need for them to work and for those employees to still receive a minimum level of their salary. The scheme’s purpose is to reduce the amount of redundancies and avoid employees being laid off without pay.

The Government has released guidance on the scheme. We still do not have all the details, but we have answered some of the most frequently asked questions below.

This follows updated guidance released by the Government as at 19th April 2020.

We are in unprecedented times and the government’s guidance is constantly being updated so it is therefore crucial that you keep up to date with the latest updates.

  1. What is furlough leave/the Coronavirus Job Retention Scheme?
  2. Can I be furloughed? Can I still be made redundant?
  3. How will my pay be calculated when I am furloughed?
  4. What if my employment has already ended?
  5. What category of workers can be furloughed?
  6. Can I work whilst furloughed?
  7. What if I can’t be furloughed?
  8. Can I be furloughed as an apprentice? Are there special rules that apply?

1. What is furlough leave/the Coronavirus Job Retention Scheme?

1.1. What is furlough leave/the Coronavirus Job Retention Scheme?

A ‘furloughed employee’ is referred to in the guidance as an employee “on a leave of absence”. Whilst a ‘furloughed employee’ is not a recognised term in UK employment law, the scheme will allow employers to place their employees on ‘furlough leave’ as an alternative to redundancy. The scope of the scheme has been broadened recently so that it is not limited to those employees who would otherwise be made redundant.  It is applies to any who are furloughed “by reason of circumstances as a result of coronavirus or coronavirus disease”. Employers whose operations have be affected by the current crisis will be able to keep employees on their payroll and then be able to apply for a grant to recover a proportion of their employees’ wages.

An employer will only be able to benefit from the scheme in respect of employees which they confirm are ‘furloughed employees’. To do this they will have to formally notify the employee that they are ‘furloughed’ and obtain their agreement. The recent Direction from the Treasury requires written agreement (rather than just a notification), however the latest guidance indicates that implied agreement will be sufficient for the purposes of the scheme, and that there needs to be a written record but the employee does not need to provide a written response. It is important that employers keep a copy of that communication for at least 5 years. Employers may need to advise employees of the potential alternatives (e.g. redundancy) otherwise employees may not wish to accept a reduction in pay (see below).

The scheme will be in place for at least 4 months from 1 March 2020 (it was originally announced to run for 3 months, but the Chancellor of the Exchequer announced last week that it would be extended until the end of June).

1.2. Which businesses are eligible?

Any employers in the UK will be eligible for the scheme including charities, recruitment agencies and public authorities provided that they have a PAYE payroll scheme in place on or before 19 march 2020, have enrolled for PAYE online and have a UK bank account.

1.3. How will employers claim this grant?

HMRC has established an online portal through which employers will be able to claim the grant. The portal has been live since 8am on 20 April 2020, with the first reimbursements expected within 6 working days of the application.

Employers will need to provide the following information to HMRC:

    • PAYE reference number
    • the number of employees being furloughed
    • the claim period (start and end date)
    • amount claimed (per the minimum length of furloughing of 3 weeks)
    • bank account number and sort code
    • contact name
    • phone number

Employers will be able to submit a claim every 3 weeks and claims can be back-dated to 1 March 2020., The online portal has been live from 20 April 2020 with the first reimbursements estimated to be made on 30 April 2020.

1.4. Will furlough leave affect employment rights?

The government guidance has helpfully confirmed that ‘furloughed employees’ will have the same rights as before including those for SSP, maternity and other parental rights, rights against unfair dismissal and for redundancy payments.
It is anticipated that employees will have continuous employment throughout the ‘furloughed’ period as this will be treated as a temporary cessation of work.

1.5. What happens after the scheme comes to an end?

The Chancellor of the Exchequer has announced that the scheme has now been extended till the end of June 2020. It may be extended further, we will have to wait and see. Once it does come to an end, it is for employers to decide whether employees can return to their duties or whether it may be necessary to consider redundancies. There is no obligation to retain the services of furloughed employees for a period of time after the scheme ends. But notice periods and statutory redundancy rights will continue to apply in the usual way.

2. Can I be furloughed? Can I still be made redundant?

2.1. Which employees will be eligible?

The scheme will potentially cover all staff paid through PAYE who have been on the payroll on or before 19 March 2020 and which were notified to HMRC on an RTI submission on or before 19 March 2020.This means an RTI submission notifying payment in respect of that employee to HMRC must have been made on or before 19 March 2020.

Employees that were employed as of 28 February 2020 and on payroll (i.e. notified to HMRC on an RTI submission on or before 28 February) and were made redundant or stopped working for their employer after that and prior to 19 March 2020, can also qualify for the scheme if the employer re-employs them and puts them on furlough. This applies to employees that were made redundant or stopped working for their employer after 28 February, even if the employer does not re-employ them until after 19 March.

The scheme applies to individuals on any type of contract including full-time and part time, agency contracts and flexible/zero hours contracts – so long as they are paid through PAYE.

Staff who were employed by one employer prior to 19 March 2020 but have since transferred to another employer under TUPE can be placed on furlough.

The minimum period of furlough leave will be three weeks.

If employees are working but on reduced hours or for reduced pay then they will not eligible for the scheme.

Employees who are ‘shielding’ in line with public health guidance can be placed on ‘furlough leave’.

Staff who are currently receiving SSP can be placed on furlough, though the fact they are sick should not be a factor in deciding whether they should be furloughed (this should be a decision based on whether they have work to do).  The furlough scheme also shouldn’t be used to cover short-term sickness absence of staff who would not otherwise have been placed on furlough.

An employee who becomes sick during furlough can be moved onto SSP or can remain on furlough.

However, please note that the position in relation to sick leave and furlough remains unclear. The updated government guidance still states that sick employees can be furloughed, but there continues to be an inconsistency with the Treasury Direction, which indicates that it isn’t possible to put someone on furlough until their SSP has ended.

Employees must take care to not discriminate when deciding which employees to place on ‘furlough leave’. However, it is not expected to be discriminatory to offer it to employees considered as ‘vulnerable’ as per government guidance. This is on the basis that offering ‘furlough leave’ to vulnerable individuals in line with the guidance is likely to be acceptable ‘means of achieving a legitimate aim’.

Self-employed individuals will be supported by an alternative scheme which we have considered in a separate blog found here.

2.2. Can I choose to be furloughed?

No, furlough leave is something which must be agreed with your employer. If you are concerned about continuing to work, for example because you or members of your household are in a vulnerable group, and you would like to be furloughed, you should discuss your concerns with your employer.

Some businesses are asking for volunteers to furlough, but this is usually subject to the agreement of their managers because furloughed staff cannot work, so this may not suit the business.

If you are doing the same or a similar job as someone who is furloughed, it is possible to rotate on and off furlough leave with them in three week blocks. You should speak to your employer about this.

Alternatively, it may be possible to agree with your employer to work from home or alternatively your employer may agree to allow you to take time off as annual leave or unpaid leave.

If you are disabled for the purposes of the Equality Act 2010, failure to allow you to work from/stay at home could amount to a failure to make reasonable adjustments and therefore be discriminatory.

2.3.I have been placed on reduced hours, am I eligible for furlough?

In the government’s recent guidance, it has announced that where an employee is working, but has been placed on reduced hours, or on reduced pay, they will not be eligible to be placed on furlough.

2.4. I am on sick leave or self-isolating, am I eligible for furlough?

Employers should not take short term illness or self-isolation into consideration in deciding whether to place employees on furlough leave. However, if an employer wants to furlough its employees for business reasons and those employees are on sick leave, they can put those individuals on furlough leave. In these circumstances, employees should not receive sick pay and would be classified as a furloughed employee. An employee who becomes sick during furlough can be moved onto SSP or can remain on furlough.

However, please note that the position in relation to sick leave and furlough remains unclear. The updated government guidance still states that sick employees can be furloughed, but there continues to be an inconsistency with the Treasury Direction, which indicates that it isn’t possible to put someone on furlough until their SSP has ended.

2.5. Does an employer have to consult with employees before furloughing?

In most cases it will be necessary to agree with employees that they will be furloughed, because their employment contracts do not give the employer a unilateral right to withdraw work/lay-off, plus in most cases pay is being reduced. If the alternatives are redundancy or unpaid leave of absence, it is very likely that employees will agree to being furloughed in order to receive the financial protection on offer.

However, if employers are identifying individuals for furlough who would otherwise be made redundant, and so the alternative contemplated by the employer to putting employees on furlough is a redundancy exercise, then this will potentially trigger collective consultation duties. If collective consultation obligations are triggered, the usual time frame for the consultation to take place is unlikely to be viable in the current situation. There is a “special circumstances” defence which may allow the process to be condensed (but it cannot be avoided altogether).

In addition to collective consultation, it is likely that individual consultation will also be required given that a change is being proposed to an employee’s current working arrangements (and potentially to their wages). The level of discussion required will vary depending on the number of employees the business has to talk to and how quickly changes need to be made.

An employer will need to consider what it will do about those who refuse consent. Would they be at increased risk of redundancy, will the employer enforce this pay cut unilaterally and hope that the employees do not claim back the shortfall of wages, or will the employer back down?

Recently updated guidance has confirmed that employers must notify employees of their furlough status in writing (the previous guidance did not require it be in writing) and keep the record of that written notification for five years.

2.6. My employer is refusing to furlough me, whilst other employees have been furloughed, can I insist on being furloughed?

You cannot insist on being furloughed. It is up to your employer to decide who to place on furlough leave.

Ideally, the employer should consult with staff beforehand.

The employer is expected to base its decision on the needs of the business.

When selecting who to furlough, the employer should ensure it applies fair and non–discriminatory selection criteria.

If your employer considers there is still work for you to do, it may not want to furlough you.

2.7. Can an employer place people on furlough leave if they cannot carry out their role due to childcare issues, but where there is work for them to do?

Employers must take care to not discriminate when deciding which employees to place on furlough leave. It is not expected to be discriminatory to offer it to employees considered as ‘vulnerable’ as per government guidance. This is on the basis that offering furlough leave to vulnerable individuals in line with the guidance is likely to be justified for health and safety reasons (it is an acceptable means of achieving a legitimate aim).

Selecting people for furlough leave because have young children at home and no alternative childcare is, on the face of it, indirect discrimination. Employers will no doubt try to justify it on the basis of a productivity argument, but this is going to be difficult if individuals can show that they can manage their responsibilities and still perform their role from home. If your employer is taking this approach, you should raise your concerns and discuss with your employer whether working from home or flexible working is possible instead.

Alternatively you could request to take paid annual leave, or a period of unpaid leave (although furlough would likely be preferable to that).

2.8. Do employers have to put employees on furlough leave instead of making redundancies?

It is currently unclear whether it will be mandatory for employers to put employees on furlough leave instead of making redundancies. However, we would advise that this is discussed as an option prior to any redundancy decisions. Whilst employers do not have to accept this, they should be following a fair procedure in making any dismissals and this includes considering any alternatives to redundancy. It therefore appears that considering furlough leave/the Coronavirus Job Retention scheme would be a reasonable part of the process.

If an employer is having cash flow problems during this crisis and cannot be reasonably expected to find an employee’s salary before it can be repaid through the scheme, and/or it seems very likely that a role will no longer be required longer term, and/or the whole business is shutting down then it may be reasonable to make redundancies instead.

Employers will need to consider if collective consultation obligations are triggered if they are proposing to enforce furlough by dismissing and re-engaging significant numbers of staff on new terms. The government guidance makes it clear that these may be triggered if sufficient numbers of employees are involved.

2.9. My employer is making me redundant. I have asked to be furloughed and have been told they are not making any applications for the furlough scheme. What are my options?

Employees who are under notice of redundancy, or who have been made redundant after 28th February can be put on furlough leave instead but potentially redundant employees do not have a right to require their employer to place them on furlough leave as an alternative to redundancy. However, it is hoped that many employers will see the new scheme as preferable to business closure and making redundancies, and certainly this is what it is intended for. It is also arguable that refusing to place an employee on furlough leave and making them redundant could amount to an unfair dismissal. You should therefore speak to your employer and explain that they have the option to furlough you and at little extra cost if you agree to a reduction of your salary to 80% (up to a maximum £2,500) meaning your employer could re-coup your costs in full from the government. Your employer would likely want you to also agree that your redundancy will still take effect at the end of the furlough scheme period (subject to any extension) and that any period of notice would continue to run during this period, and any holiday entitlement will be reduced to the statutory minimum.

2.10. Can my employer delay my redundancy and put me on furlough?

Yes, but they are not compelled to. Employees who are under notice of redundancy, or who have been made redundant after 28th February can be put on furlough leave instead but potentially redundant employees do not have a right to require their employer to place them on furlough leave as an alternative to redundancy. However, it is hoped that many employers will see the new scheme as preferable to business closure and making redundancies, and certainly this is what it is intended for.

2.11. I have tried to get my employer to agree to furlough me because I think I am eligible, but they aren’t listening to me. What should I do?

There is no obligation on your employer to put you on furlough leave, and the most common reason not to furlough is because your employer still needs you to do your job. However, where the alternative is redundancy or business closure it is hoped that many employers will use the new scheme, and certainly this is what it is intended for. You should point to the relevant part of the government guidance which supports your case that you are eligible, and help your employer understand that you can be furloughed at no cost to them (if you agree to a reduction of your salary to 80% (up to a maximum £2,500). If short term cash flow is an issue, you can even agree to defer being paid until you have been accepted on to the scheme and your employer has received the money from the government. You can also consider speaking to colleagues who may be in a similar position and approach your employer collectively. You may enlist the help of a union or a lawyer to argue your case for you.

2.12. Can I be made redundant whilst on furlough?

An employer can make employees redundant at any time if there is a reduced need for their work, whether that is whilst they are on furlough leave or afterwards. If employees are made redundant their employment rights remain the same, these include:

Notice pay – all employees are entitled to be paid notice if they are made redundant. Their contract will usually specify the length of notice payable, but this is also subject to the statutory minimum (one week’s notice for each complete year of service up to a maximum of 12 weeks).

Statutory redundancy pay – if an employee has two or more years of service, they will qualify for statutory redundancy pay. This is a formula payment of one week’s pay (capped at £538 from 6 April 2020) for each complete year of service (capped at 20 years’ service)), subject to a multiplier based on the employee’s age.
Accrued holiday – all employees are entitled to be paid accrued but unused holiday in the current holiday year.

Employees should seek specialist advice if they have concerns about the fairness of any proposed redundancy/redundancy dismissal.

Please refer to the questions above which deal with the question of whether employers must furlough, or at least consider this, as an alternative to redundancy or risk any subsequent dismissal being unfair.

2.13. Can my employer use the Job Retention Scheme Grant to make redundancy payments?

While an employer can make employees redundant whilst on furlough, the government guidance states that the grants cannot be used for redundancy payments.

3.How will my pay be calculated when I am furloughed?

3.1 What will HMRC reimburse?

Employers will be able to claim 80% of a furloughed employee’s salary up to a cap of £2,500 per month plus the employer’s National Insurance contributions and minimum auto-enrolment employer pension contributions.

For salaried employees, the wages which can be claimed will be based on their normal salary.

The Government has recently updated the guidance to say that an employer can reclaim any regular payments it is obliged to pay its employees as well as basic salary (subject to the overall cap of £2,500 per person). This includes wages, past overtime, fees and compulsory commission payments. Compulsory presumably means contractual. It can only be referring to the commission from past sales as the furloughed employees cannot be completing new sales when on furlough.

Discretionary bonus (including tips) and commission payments and non-cash payments should be excluded.

The 80% also does not include non-monetary benefits (e.g. the value of health insurance or a car). Benefits provided through salary sacrifice schemes (including pension contributions) that reduce an employee’s taxable pay should also not be included in the reference salary.

For employees whose pay varies, e.g. those on zero hour contracts, the wages which can be claimed will be based on the higher of their equivalent pay in the same month in the previous year or their average monthly pay over the 2018/19 tax year, whichever is higher.

If the employee has been employed for less than a year, the employer can claim for an average of their monthly earnings since they started work.

If employees are part of a salary sacrifice arrangement in respect of pension or childcare vouchers for example, the employer will need to use the post-sacrifice salary for calculation purposes. However, HMRC has confirmed that the coronavirus will be treated as a life event which would justify the employee opting out of the salary sacrifice scheme to increase their furlough pay. This will need to be appropriately documented.

Claims for full or part time employees returning from statutory leave (such as statutory maternity leave) after 28 February 2020 should be calculated against their normal salary, before tax, not the pay they received whilst on statutory leave.

3.2. Are employers required to ‘top up’ the additional 20% of their employee’s wages (or pay the extra salary for staff earning over £3,125 per month)?

No they are not required to do so however some may wish to. However this is why it is important to obtain employee agreement to furlough where pay is being reduced.

3.3. Does a furlough payment take into account my overtime pay or is it just basic salary?

Under the Scheme employers can claim up to the lower of 80% of usual monthly wage costs or £2,500 per employee, plus the associated employer national insurance contributions and minimum auto-enrolment employer pension contributions.

The 80% calculation is based on the employee’s gross salary at the last full pay period before 19 March 2020 (this has changed from the 28 February 2020 date previously given, although employers can use the 28 February 2020 salary if higher for their first claim). The Government has also recently updated the guidance to say that an employer can reclaim any regular payments it is obliged to pay its employees (subject to the overall cap of £2,500 per person). This includes wages, past overtime, fees and compulsory commission payments. Compulsory presumably means contractual/guaranteed over-time.

Employees who regularly earn overtime are likely to argue that this gives rise to an obligation to pay over-time as part of their normal wage.

3.4. Is furlough pay based on hours normally worked (e.g. 60 hours) or on contracted hours (e.g. 40 hours)?

If you are furloughed, your employer will be able to claim the reimbursement for your wages based on 80% of your usual monthly wage cost before tax, as of 19 March or £2,500, whichever is the lower sum.
As such, your furloughed pay will be based on actual hours worked and your usual monthly pay.

3.5. What if my monthly pay varies?

In this case, your furloughed pay will depend on how long you’ve been employed and when you commenced work.

If you have been employed for less than one year, the reimbursement will be based on an average of your monthly earnings since you started work.

If you have been employed for more than one year, the reimbursement can be claimed on the basis of the higher of either:

a. the same month’s earnings from the previous year; or
b. average monthly earnings from the 2019-2020 tax year (i.e. 6 April 2019 to 5 April 2020);

If you only started work in March 2020, the reimbursement will be based on your pro-rata earnings so far.

3.6. Does my employer have to continue to pay me and then claim a furlough payment back from the government or do they only have to pay me once they receive the money?

Assuming your employer does not have the contractual right to reduce/defer your pay (which is rare), your employer has to continue to pay you as normal, unless you expressly agree otherwise. If short term cash flow is an issue, you can agree to defer being paid until you have been accepted on to the scheme and your employer has received the money from the government, but this may be difficult for you as there is still some uncertainty about when the scheme will start paying out.

3.7. I am on furlough leave and have been told to take annual leave, will I be paid the reduced rate?

The Government has recently attempted to make the interaction between annual leave and furlough leave a little clearer. It has been announced that employees continue to accrue and are entitled to take annual leave whilst on furlough, and this should not interrupt furlough leave or affect an employer’s claim. Employees who take annual leave whilst on furlough should receive their normal contractual pay, so employers will be responsible for ‘topping up’ their pay to 100% for these days. The top-up cannot be recovered under the furlough scheme. Unfortunately, what remains unclear is whether an employer is able to force its employees to take annual leave whilst on furlough leave. It is hoped that the Government will issue further guidance on this point.

3.8 Can my employer tell me to take annual leave?

Recent guidance has confirmed that employees can take their annual leave whilst furloughed.

Employers have a right to tell employees when to take annual leave. However, if an employer decides to do this they must tell their employees at least twice as many days before the amount of days they need employees to take. For example if an employer would like its employees to take 2 days annual leave it must give its employees 4 days prior notice. If furloughed employees have pre-booked holidays then they will be able to take them; employers don’t have to allow rescheduling unless the employees would ordinarily have a right to reschedule.

In order to maintain good employee relations, employers should ensure that they explain why they require employees to take annual leave and they should try and resolve anyone’s worries about how it will affect their holiday entitlement.

4. What if my employment has already ended?

4.1. Can employees who have already been made redundant be re-hired and put on furlough leave?

An employer who has made employees redundant on or after 28 February 2020 can re-employ them and place them on furlough leave. This applies to employees that were made redundant or stopped working for an employer on or after 28 February 2020, even if the employer does not re-hire the employee until after 19 March 2020. However, there is no obligation for an employer to do this.

Businesses which have already made redundancies or commenced redundancy consultation (particularly collective redundancy consultation) will need to consider whether and how the availability of this scheme will alter their plans and the impact on any appeals against dismissals.

4.2. I left my old employer on 27 February. I was due to start with my new employer at the beginning of April. Can I be furloughed?

Unfortunately, you cannot be furloughed by your former employer if you were not on their payroll at 28 February 2020. For the same reason, your new employer cannot furlough you as the scheme only applies to those who were on its payroll at 19 March 2020.

4.3. I left my old employer on 2 February and I joined my current employer on 8 March. Can I be furloughed by my current employer?

The key date is 19 March 2020. If you were on your new employer’s PAYE payroll and your employer submitted real time information payroll data to HMRC by that date, you can be furloughed by your new employer. If you were not on their payroll on 19 March 2020 you cannot be furloughed. You should check with your employer to establish your eligibility. You cannot be furloughed by your former employer if you were not on their payroll on 28 February 2020.

4.4. I am working my notice but my new employer is now unable to employ me, can my present employer put me on furlough?

If you were still under notice (and your employment was still continuing) on 19th March 2020, then yes, your current employer can furlough you. However, the decision is your employer’s.

If your employment was due to end because of redundancy you are eligible under the scheme. Your employer will need to reinstate you first.

Under the scheme, it appears that if you resigned voluntarily you will also be eligible. In such a scenario, you should retract your resignation.

4.5. I resigned from my job on 26 March this year, can I ask my former employer to furlough me?

If you were on your former employer’s payroll on on or before 19 March 2020, you could still be eligible to be furloughed even if you resigned voluntarily.

You will have to persuade your former employer to reinstate you and then place you on furlough.

4.6. I am currently not working but was due to start a new job this month, but it has been withdrawn. What are my rights?

If you had entered into a contract with your new employer you may be entitled to some payment under the terms of that contract (notice pay for example). Your rights will depends on the terms of your contract, you should seek further advice on this.
You will not be eligible under the furloughing scheme if you were not included in any PAYE payroll scheme at the key date, which is 28 February 2020.

You will be eligible for assistance under the welfare system, including Universal Credit.

For further information please check here.

4.7. My employer has asked me to sign a furlough agreement but they are using it to change other contractual elements, for example that after furlough finishes I will agree to a 20% pay cut. Can they do that?

Your employer should not be using your agreement to furlough as an opportunity to vary your other terms, particularly when it comes to matters as fundamental as your pay.

The starting point it to check whether the terms of your contact allow your employer to vary your terms and conditions. Even if such a clause exists, the employer should exercise caution when seeking to impose changes, as such a clause does not give your employer carte blanche to make changes to the contract.

Legally, an employer cannot impose a pay cut on you without your express consent. Any consent obtained under duress (that you accept the reduction or face redundancy/dismissal) will be open to challenge.

4.8. When will my employer make a claim?

Your employer will have to make a claim for your wages on an online portal. HMRC has launched its online portal, this has been live since 8 am on 20 April 2020, it has been announced that employers can expect first payments to be made within 6 working days of an initial claim.

5. What category of workers can be furloughed?

5.1. I am a temporary worker/bank staff. Am I eligible for furlough leave?

Yes, if you were on the employer’s PAYE payroll on 19 March 2020.

If you are not paid through PAYE, if you pay tax on your trading profits through Income Tax Self-Assessment, you may instead be eligible for the Self-Employed Income Support Scheme (SEISS). Please refer to our FAQs relating to this scheme.

5.2. I am an agency worker, am I entitled to furlough leave?

Agency workers on PAYE payroll can be furloughed by the agency, so long as they are not doing any work.

5.3. Are employees on fixed term contracts which are due to finish eligible for furlough leave?

Employees on fixed term contracts can be furloughed. Their contracts can be renewed or extended during the furlough period without breaking the terms of the scheme. Where a fixed term employee’s contract ends because it is not extended or renewed you will no longer be able claim grant for them.

5.4. I’m an executive director, can I be furloughed?

Company directors who are also employees can be furloughed (so long as they are on the company’s PAYE as at 19 March 2020). They can still perform their statutory duties, but not other work for the company.

This also applies to salaried individuals who are directors of their own personal service company (PSC).

5.5. Can an employee on unpaid leave be placed on furlough?

In accordance with the updated guidance, employees who were placed on unpaid leave after 28 February 2020 can be placed on furlough leave. However, if an employee went on unpaid leave on or before 28 February 2020, they cannot be furloughed until the date on which it was agreed they would return from unpaid leave.

5.6. Can an employee who has been told to ‘shield’ be placed on furlough leave?

Employers can claim under the scheme for those employees who are shielding in line with public health guidance or who need to stay at home with someone who is shielding and they are unable to work from home and the employer would otherwise have to make them redundant. The government has also changed the sick pay regulations to provide that those individuals who have been advised to ‘shield’ and are incapable of working will qualify for Statutory Sick Pay.

6. Can I work whilst furloughed?

6.1. Can employees continue to work while furloughed?

No, employees should not carry out any work for their employer during this time. Employees can undertake volunteer work or training, but only so long as it does not entail providing services to or generating revenue for their employer i.e. what is envisaged here is that employees can volunteer, for example as an NHS volunteer or for a charity whilst on furlough. If staff are required to undertake training during furlough leave, they are entitled to be paid at least the applicable minimum wage rate for doing so, even if this exceeds the 80% which will be reimbursed by HMRC.

The latest guidance confirms that furloughed staff can carry out work for other (non-linked/associated) employers without breaching the terms of the furlough scheme.

6.2. My employer is backdating my furlough leave to 1st March, despite me working full time all month. Furthermore, he has also made it clear that I am expected to continue working during my furlough leave, when I know I shouldn’t be under the rules of the scheme. What should I do?

The furlough scheme is essentially a grant from the government to employers to cover 80% of a furloughed employee’s wages. It is a clear condition of the scheme that furloughed employees cannot undertake work. They can however take part in volunteer work or any training provided that it does not provide services to generate revenue for their employer.

You should raise this with your employer. If this falls on deaf ears, ultimately it is your employer’s risk because HMRC has said that they will audit the operation of the scheme retrospectively so if they discover that you have continued to work they may try to recoup the grant from your employer. You should still have received your pay from your employer.

The latest guidance explains that employees and the public will be able to report suspected fraud through an online portal and warns employers that payments may be withheld in full or need to be repaid if the claim is based on dishonest or inaccurate information or found to be fraudulent.

6.3. I had booked annual leave but have now been furloughed. Can I cancel it and take it later in the year?

Yes, subject to any specific notice requirement in your contract/any applicable policy. The government is changing the regulations on holiday so that employees are permitted to carry-over up to 4 weeks’ leave where it was not reasonably practicable to take it in the leave year “as a result of the effects of the coronavirus”.

In the Government’s latest guidance it has been made clear that if an employee takes annual leave whilst on furlough leave, this period will not interrupt furlough and the payment will be recoverable (only the 80% of pay which is covered by the scheme). It has been made clear that the employer will be responsible for the balance/topping up to 100%, because as per the usual rules, employees should receive their normal contractual pay for any holidays taken whilst on furlough. Unfortunately, what remains unclear is whether an employer is able to force its employee to take annual leave whilst on furlough leave. It is hoped the that Government will issue further guidance on this point.

6.4. I’ve been furloughed. Can I work elsewhere to top up my income?

Employees can start a new job when on furlough (meaning they might end up earning 80% of the old salary and 100% of a new one). This was not prohibited in the earlier guidance, but the new guidance expressly allows it. However, employees cannot work for any organisation linked or associated with their current employer. The guidance does say it has to be allowed under your employment contract, therefore check what your contract says because some contracts will contain restrictions on working elsewhere during employment. If so, you could speak to your employer and try to get their agreement to relax those restrictions temporarily. It is, however, clear that you cannot do work for your employer seeking the reimbursement during furlough.

Also note that the government guidance for employees states that an employee can be furloughed by one employer and continue to work for the other, or can be furloughed by both employers. The scheme will reimburse each employer for 80% of the employee’s salary, up to the £2,500 cap for each job.

7. What if I can’t be furloughed?

7.1. If I can’t be furloughed, and I am out of a job, what should I do?

If you also do not qualify for assistance under the self-employment scheme, you can look at putting in a claim for Universal Credit or Employment and Support Allowance and potentially other benefits (subject to meeting the eligibility criteria). You may also be able to benefit from mortgage holidays, if this is applicable to your circumstances.

8. Can I be furloughed as an apprentice? Are there special rules that apply?

8.1. Can apprentices be furloughed?

Apprentices can be furloughed in the same way as other employees. However, apprentices can continue to train whilst furloughed, where the training provider can continue to deliver training remotely. Apprentices cannot provide a service to or generate revenue for, or on behalf of the employer. The training provided in this context includes apprenticeship off the job training.

The training provider is subject to the requirement to ensure that apprentices are paid at least the Apprenticeship Minimum Wage, National Living Wage or National Minimum Wage for the time they spend training. It should be noted that if there is a short fall between the amount claimed under the furlough leave and the appropriate minimum wage, the employer will need to cover it.

8.2. What is the position if apprentices are made redundant?

Where an apprentice has been made redundant, they should be supported by their training provider to find alternative employment and enable them to continue their apprenticeships as quickly as possible and within 12 weeks. The Government has announced that they will keep under review whether this 12 week period should be extended.

If there are a large number of apprentices who have been made redundant, the ESFA will attempt to provide exceptional practical support to the apprentices and training providers to secure alternative employers for the individuals.

8.3. If there is a break in my apprenticeship do I need to report it?

Provisions have already been set in the apprenticeship funding rule for when there is disruption in learning and the following occur:

    • Less than 4 weeks – in these circumstances neither the employer, nor the training provider, needs to report the interruption, the end-date for the apprenticeship remains the same there is no change to the payment of funding
    • More than 4 weeks – in these circumstances, employers and/or training providers must report a formal break in learning. Where a break in learning is reported, the payment of funding to the training provider will be suspended for the duration of the break in learning.

It should be noted that the funding rules currently state that a break in learning must be initiated by the apprentice. Employers and training providers can now, temporarily, report and initiate a break in the learning where the interruption to learning is greater than 4 weeks.

We are in unprecedented times and the government’s guidance is constantly being updated so it is therefore crucial that you keep up to date with the latest updates.

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