The F Word – Furlough

Since the Government’s Coronavirus Job Retention Scheme was announced, we have been inundated with queries about furloughing employees, to qualify for the Scheme.

“Furlough” itself doesn’t mean anything in particular in UK employment law. It appears to be a turn of phrase which the Government has chosen to apply to this particular situation; when employees are off work, paid, but would (alternatively) be laid off or redundant, but remain employed in times of economic crisis. It is unclear whether HMRC intends to rely on this guidance only, or whether there will be actual legislation as yet but as soon as we know we will update this blog.

What is the Scheme?

The Government’s Coronavirus Job Retention Scheme was announced on Friday, with the intention of reducing the number of layoffs and redundancies. The Government’s aim is to get this scheme up and running before the end of April. The Scheme is not limited only to those employees who would have been made redundant as per previous guidance and is open to all UK employers that had a PAYE scheme in place on 19 March 2020 providing the employees have a UK bank account. Employees are retained as employees, but 80% of the salary (up to £2,500) will be paid for, for 3 months, by the Government under this Scheme. Once furlough ends, they will go back to work as normal.

Any organisation with employees can apply, including charities, recruitment agencies and public authorities; however, the government does not expect public sector employers to use it as long as central government continues funding wage costs in the normal way.  With agency employees, the scheme is only available for agency employees who are not working.

Employers can reclaim up to 80% of wage costs up to a cap of £2,500 per month, plus (not including) the associated employer NICs and minimum auto-enrolment pension contributions on that wage. New Guidance has provided that this can be used to include previous overtime, fees and compulsory (contractual) commissions – but does not include tips, discretionary bonuses, commissions or benefits of any kind.

An employer can choose to top up to 100% but does not have to (subject to employment law and renegotiating any contractual entitlements).

The 80% of the employee’s salary is based on the higher of

(1)        The earnings in the same pay period in the previous tax year;


(2)        The average earning the previous 12 months (or less, if they have worked for less).

For an employer to qualify for the payment under the scheme, the employee must have been furloughed for a minimum of three weeks solid. After this three-week period the employee can come off furlough. Therefore, this means an employer can rotate staff between furlough and non-furlough.

It is a grant so is not repayable by the company. The current guidance is that all UK businesses will be eligible.

Dependent on the contract, it is likely that you will require the employee’s consent, as their status will change to a “furloughed” employee. We are recommending this is done in writing in case evidence is needed or a dispute arises down the line.

An employer will also be able to choose whether the employee only receives the Government subsidised 80%, or whether the employer meets the cost of the additional 100%. If the intention is for the employer to receive only 80% of their salary then you will, again, need to obtain their agreement to such a decrease in salary. If you are receiving public money to pay someone’s salary, or part of it, you must continue to use that money to pay that employee and should not furlough them.

When agreeing changes in hours (and acceptance of 80% pay), assuming the contract does not already allow for that, normal employment law applies.  The employer must be careful not to discriminate in deciding who to offer furlough too.  My view is that prioritising vulnerable workers is unlikely to be discrimination, as prioritising the over 70s (direct age discrimination against those under 70) is almost certainly justifiable, and those who do not suffer from serious health conditions are not a protected class.

At this point, we should add, that we are still awaiting further government guidance and potential draft legislation, so there are still some points that are still unclear, and the advice below may be subject to change as the further information develops.

When is the portal open for the Coronavirus Job Retention Scheme? 

HMRC have confirmed that an online portal is set to be introduced for the Scheme, where employers can apply for the reimbursement. The portal also intends to offer new guidance in a bid to help those submitting claims. It will be processing payments of staff who have been subject to furlough. This is set to open from Monday 20 April 2020 whilst payments are set to be made by Thursday 30 April.

It is expected that payments will be made within 4-6 working days of HMRC receiving a claim.

Guidance has stated that the portal will be open on a 24/7 basis, and in the event that the portal is facing extremely high traffic, which is to be expected, online users will be placed within a queue.

HMRC has confirmed that they will prosecute employers who abuse the system and has encouraged employees to inform HMRC where this is taking place, to avoid being complicit. We believe that examples of abusing the system would be, most prominently, still requiring employees to work whilst furloughed.

Who is furloughed?

As far as we understand, the Scheme will only reimburse the wage costs for any employees who were paid through PAYE and employed on 19 March 2020. This means employees taken on after the 19 March 2020 are excluded from the scheme. However, employers will be able to re-employ people who have since been made redundant after the 19 March 2020 and furlough them.

An employee must be notified in writing of their employee status and must keep a record kept for 5 years after furlough. If you haven’t done this, we can support you and provide you with a furlough agreement; please just get in touch.

You can claim the furlough 80% for employees who have (for example) childcare commitments due to school closures or are vulnerable and therefore should self-isolate in line with public health guidance.

In terms of company directors, from our understanding they can be furloughed but only if they aren’t doing any work apart from statutory duties (which is very limited, and includes filing annual returns, board meetings etc). The furlough in this case would have to be part of a formal board decision, noted in the company records, and the company should make sure they have a paper trail of this decision and that it is communicated in writing.

If you are employed by your own umbrella company, your umbrella company can furlough you. And if you are an individual and employ a nanny or cleaner etc – you can furlough them provided they have been paid through PAYE, you don’t need to be a limited company etc to do so.

Employees on sick pay or self-isolating cannot be furloughed but can be furloughed afterwards. In relation to sick pay, if an employee is sick and self-isolating, those individuals can only get SSP (and can provide sick notes through 111 online); as furlough is only available after this. Employees who are shielding (these are the high risk people) can be placed on furlough.

Employees on maternity (or similar) leave can continue to draw SMP (or similar) payments.  The guidance does not prohibit women on maternity leave agreeing to return to work early and then being furloughed, or electing to change to shared parental leave and then being furloughed.

Employees selected to be “furloughed workers” should be selected for furlough based on their job responsibilities and whether they would truly otherwise be laid off or redundant, and should ensure that they don’t consider any protected characteristics (eg. gender, disability, pregnancy and maternity) in the course of making such decisions, as this could be discriminatory.

With regard to those employees who had previously resigned or whose new jobs have been delayed. They may be able to ask their former employer to reinstate them and then furlough them.  Similarly, where an employee has been made redundant, they can be reemployed and furloughed. However, the employer is under no obligation to do so. We are concerned that doing so may jeopardise an employee’s otherwise legitimate claims under the Scheme.

In this respect HMRC might not reimburse the salaries. Unfortunately there’s still not complete clarity over whether re-employed employees will be suitable for the Scheme. We are concerned that doing so may jeopardise an employee’s otherwise legitimate claims under the Scheme.

Under these circumstances you would have to fund this yourself, and then seek reimbursement thereafter, unless they agree to defer their salary.  Please note, where someone was dismissed for gross misconduct or who have resigned, employers should be very careful if taking them back, as the risk is on the business.

What can employees do whilst furloughed?

Employees existing employment contracts will remain in force whilst employed, which means that they will also continue to accrue holiday and be able to access any contractual employment benefits, whilst furloughed.

An employee who is on furlough leave can choose to volunteer or do training so long as it does not generate any money for their employer. The new guidance makes it clear; an employee who has been furloughed CAN work for another employer.  It can’t be for the same employer as they can only volunteer or do training for the employer who has furloughed them, but they are permitted to work for another company (provided their contract permits this). This means they can earn 80% from furlough, and 100% in a new job.

As per new government guidance, apprentices can be furloughed as other employees, and they can continue to train whilst furloughed. However, you must pay your Apprentices at minimum wage for the time they spend training. This means you must cover any shortfall between the amount you can claim for their wages through this scheme and minimum wage.

Employers can only claim once every three weeks, i.e. they cannot get weekly reimbursement.  Claims can be backdated to 1 March 2020. Finally, employees can be furloughed multiple times, provided that each period of furlough is at least 3 weeks.

Can employees put themselves on furlough leave?

Essentially, no. Employees can suggest it may be a good solution or alternative to any threat of redundancy, but at the moment the guidance suggests that, to qualify for furlough leave, employers will have to show that those employees would otherwise be laid off or redundant, and not simply that they would be on unpaid leave. That is a threshold which only the employer can evidence.

Employees cannot simply place themselves on furlough leave; it has to be agreed with their employer.

Hundreds of thousands of businesses are having to make substantial adjustments in an effort to come out of the other side of coronavirus, this is an especially tough undertaking given the uncertainty as to when this situation will come to an end or what the economy will face once we are able to emerge.

How does furlough work in conjunction with annual leave?

In line with brand new government guidance, we understand that employees can take annual leave whilst furloughed, as they are not mutually exclusive statuses.

However, if an employee is set to take annual leave whilst they are furloughed, they must be paid in full for this leave (at 100%), where the annual leave is part of the employee’s first four weeks of entitlement. Employers should still be able to claim the 80% back.

Further information has been covered on this topic on our new blog explaining furlough and annual leave, which you can find here.

Temporary workers

If you’ve been employed (or engaged by an employment business in the case of agency workers) for a full year, employers will claim for the higher of either:

  1. The amount you earned in the same month last year
  2. An average of your monthly earnings from the last year

If you’ve been employed for less than a year, employers will claim for an average of your monthly earnings since you started work. The same arrangements apply if your monthly pay varies such as if you are on a zero-hour contract.

If you started work in February 2020, your employer will pro-rata your earnings from that month.

Bonuses, commissions and fees are not included as part of your monthly earnings.

Here at Thrive, we are providing support through our helpline at and we are also offering specific advice and draft letters for employers to agree with their staff furlough leave, at a reduced fixed fee. Please do not hesitate to get in touch if we can be of any assistance.

By the Thrive Tribe

(updated 15 April)

Anything within this article should not be taken as legal advice. Any information provided will be general advice and for reference purposes only. It does not constitute legal advice and should not be relied upon as such. Specific legal advice about your specific circumstances should always be sought separately before taking or deciding not to take any action. If you wish to obtain specific advice to your situation and your decisions, please contact us and we will thereafter be able to advise.

Related Articles

Can you sack someone who works in a supermarket and refuses to handle money?

Yorkshire Legal Awards: Diversity and Inclusion Award

Furlough Bonus Scheme: What is it, and What’s the Point?

Unshielding Employees – What are their Rights?

The impact of COVID-19 on students and the new scheme.

Women through the cracks: Sex discrimination

Do you need to offer an appeal in redundancy dismissal situations?

What is a collective redundancy and what are employers’ obligations?

Race Discrimination: What is It, and How Can It Be Prevented?

Update: Spanish Quarantine: What Does This Mean For Employers and Employees?

Indirect Race Discrimination: What is It, and How Can It Be Prevented

Race Discrimination: What is It, and How Can It Be Prevented?

Update: Employment Status. Hairdresser wins landmark case.

Maternity Discrimination and Flexible Furlough

Women Through the Cracks

SSP and Travel

June’s Top 10 FAQ’s

Hill v Lloyds Bank: Discrimination and Mental Health

Pride month – LGBT legal leaders

Test and Trace update

Furlough Fraud

Commission under Furlough

Marital Discrimination: What Happens when Your Employees Split?

Disability & Shielding

Future of Furlough

Returning to work safely following Covid-19

A Four Day Week – Is It The Future?

Utilising Technology for Mental Health Support during Covid-19

#BLACKLIVESMATTER – HR professionals and their role in tackling racism, and what we are doing at Thrive Law

The importance of Redundancy Consultation – the problem with Jamie’s Italian

LGBTQ+ Figures in the Legal Sector

Calculating notice pay for employees on furlough

The Future of Furlough

Test and Trace: Employer’s Obligations

Life in Lockdown: How it has impacted the #ThriveTribe

Life in Lockdown: The Distressing Rise in Domestic Abuse and How Employers Can Help

Life in Lockdown: The Impact of Grief and Employees’ Rights

Managing my Mental Health as a Mother

Life in Lockdown: NHS Staff and Possible PTSD After COVID-19

Health Care Workers and PPE Concerns: What are Their Duties and How Are They Protected?

The effect of lockdown on diversity in the workplace

Observing Ramadan during Lockdown

Emergency Volunteering Leave

Dealing with redundancy during COVID-19

Health and safety dismissals: An employee’s right to stay safe during a pandemic

Unfurloughing employees

Sleep and mental health

Raising concerns amid Covid-19: Are Employees Protected?

Maintaining your teams Mental Wellbeing (whilst working from home/Furlough)

Workplace Safety: 10 Important Steps to Making Your Workplace Safer for Employees

Airline crew launch “Project Wingman”

Statutory Sick Pay and Coronavirus

Why is sleep so important?

Pregnancy, Maternity and Furlough

Flexible working – is it possible in a law firm?

The superhero firms helping out in the coronavirus crisis

What are the Signs of Stress?

Statutory Duties owed by a Director of a Company; and How Do They Work with Furlough?

A barristers analysis of holiday pay and furlough

Coronavirus and Apprenticeships

Furlough and Annual Leave: How does it work?

Vulnerable and shielded employees; what are your rights?

The Coronavirus Act 2020

Workplace Accessibility: Is your workplace accessible to people with disabilities?

Coronavirus – FAQ’s

In the News: Coronavirus Employer obligations

UK in Lockdown – What You Need to Know

The F Word – Furlough

Short Time and Layoffs

School Closures

The Impact of Coronavirus on Employment – The Home Working Revolution

How to Prepare for a Remote Workforce

Coronavirus is contagious, but panic is too

What are the different types of Whistleblowing?

The Coronavirus and Flexible Working – What Your Organisation Can Do

Key Employment Law Changes in 2020

IR35 Changes – What do you need to know?

In the Media: Fairhall v University Hospital of North Tees & Hartlepool Foundation Trust

There’s a Storm Coming: Do You Have an Adverse Weather Policy for Employees?

May Bank Holiday Change Blog- All Change for 2020!

LGBT+ History Month

In The News: Bereavement Leave

The Thrive Tribe’s Christmas Holiday

In The News: Discrimination and Equal Pay

Keep Informed: Its Beginning to Look A Lot Like Brexit – What will the Withdrawal Bill Mean for Employment Rights?

Bring Your Dog to Work – For More Than Just a Day?

In the News: Hangover Days

Political Discourse and Voting at Work: What are Employees’ Rights?

Vegetarianism & Veganism – Are they protected as Philosophical Beliefs?

Diversity: More than just Box-Ticking and Policies

Drugs and Alcohol Policy: Support or Discipline?

Bullying and Harassment in the Workplace

Yorkshire Post Excellence in Business: Social Mobility Award

Topic UK Magazine October 2019

Calling Time on the Booze Culture

Mental health discrimination is limiting the opportunities in the workplace for those who have served in the armed forces

How to Thrive – Top tips to reduce stress in your organisation

Asda’s Employment Contract Changes: Fair or Foolish?

Keep Informed: MacDonald’s CEO dismissed for relationship at work

How to Handle Allergies in the Workplace

Menopause in the Workplace

The 4 Day Week Report

Feeling SAD?

Keep Informed: New case criticises workplace “banter” and awards £54,000 for race and sexual orientation discrimination

Surviving or Thriving?

Keep Informed: Women and Equalities Committee proposes changes to enforcement of discrimination rights

The Good Work Plan

Working 9 to 5, 4 Days a Week…?

Is your organisation ready for Generation Z?

Thriving In The Workplace and the #OneMind Petition

Dyslexia in the Workplace

Overpayments and Deductions from wages

The UK’s increasingly diabetic workforce

TheBusinessDesk: Further expansion for law firm; Promotions at engineering specialist; and more

LGBTQIA+ in the Workplace

Eid in the Workplace

Neurodiversity in the Workplace

Leeds & Yorkshire Lawyer Magazine – 11th April 2019

Recruiting Times – 12th February 2019 Employment contracts: What to check for before accepting the job

HR News – 6th February 2019 Over half of working Brits have accepted a job offer without checking the contract first.

Yorkshire Legal News – Thrive Law continues rapid growth – 12th November 2018

BR Online: Employee wellbeing and human capital – November 2018

MMB Magazine – 5 November 2018

The Telegraph- Business 24 October 2018

H & N Magazine 3 October 2018

South Leeds Life 3 October 2018

The Yorkshire Post 10 October 2018

Article in People Management- “Employers must do more to tackle male ‘stigma’ around shared parental leave” – 30th July

The Business Desk- “Independent law firm launches in Yorkshire”– July 16th

Interview with Ascension Club Leeds- July 11th

Law Society Gazette – 3rd May 2018

Stylist Magazine – 21st May

Yorkshire Post – 2 May 2018 – Greg Wright The Case for introducing mental health first aiders at work

What Is YOUR Workplace Doing for Ramadan?

April Updates in Employment Law

Thoughts On “Gagging Orders”

Time to Talk Day 2019

The Loneliness Epidemic

Thrive’s round up of 2018!

To talk or not to talk?

Why employers should exercise caution when using NDAs

Being your true self at work boosts mental wellbeing and performance

How to spot and eliminate risks of office workplace accidents

Why The Best Investment Is In Your Mental Health

Supporting LGBT+ Mental Health in the Workplace

What your employer needs to know when your child has a mental health illness – guest blog

The Do’s And Don’t For A Happy Employee – Guest Blog

HR leading the way into GDPR compliance for businesses

Dealing with stress in the workplace

Welcome to our new website and blog!

Lawyers in Lockdown