Guidance on the Government’s Coronavirus Job Retention Scheme

Trinity Employment, Business and Property barrister, Andrew Crammond examines the latest Government guidance (“the Guidance”) on the Coronavirus Job Retention Scheme (“the Scheme”) published on 26 March 2020.

What is the Scheme?

As many will be familiar, the Government has pledged to protect 80% of an employee’s wages (up to a cap of £2,500) when an employee of a UK employer is placed on furlough (lay off for a period of time). The Scheme is expected to exist for at least a period of 3 months commencing 1 March 2020, although this may be extended.

The aim of the Scheme is to protect jobs and avoid loss of employment in the current difficult times ahead where operations have been severely affected by the COVID-19 pandemic.

The Scheme is expected to be up and running by the end of April 2020.

Importantly, claims may be backdated until 1 March 2020.

The Guidance sets out the terms of the Scheme for employers (though it is important for employees to know their rights and the Guidance is a good starting point for this). The link to the full Guidance can be found below. However, the following is intended to summarise some of the key aspects of the Scheme and the Guidance.

Who does the Scheme apply to?

The Scheme applies to numerous different types of employees of UK employers, including businesses, charities, recruitment agencies and public authorities.


  • Employers must have created and started a PAYE payroll scheme on or before 28 February 2020;
  • Employers must have a UK bank account; and
  • Employees must be on that payroll at that time.

Types of employees for whom the Scheme can apply include full time, part time, agency contract and flexible or zero-hours working employees.

It is worth noting the following:

  • the Scheme covers employers and employees who were made redundant since 28 February 2020, if they are re-hired by their employer;
  • employees who are shielding in line with public health guidance can be placed on furlough; and
  • interestingly, employees who have more than one employer can be furloughed for each job. Each job is separate and the cap applies to each employer individually.

In reality, as the Guidance sets out, the Scheme is more likely to benefit private sector employer and employees than it is the public sector, whom are likely to be continuing essential public services.

It is also important to remember that where a company is placed under the management of an administrator, the administrator can also access the Scheme. 

Which employees cannot be furloughed and a benefit received under the Scheme?

However, there are restrictions as to when the Scheme can be used.

The Guidance sets out some of those restrictions:

  • when on furlough leave, the employee cannot undertake work for or on behalf of the employer – including providing services or generating revenue. This reads as relatively wide and must not be forgotten by employer or employee. However, furloughed employees can take part in voluntary work or training (which must still be paid at least in line with national minimum wage or national living wage) in some circumstances. It is not known precisely what the penalty will be if an employer using the Scheme still has an employee working or providing services during furlough;
  • if an employee is working, but on reduced hours or pay, they will not be eligible under the Scheme;
  • employees on unpaid leave cannot be furloughed, unless they were placed on unpaid leave after 28 February 2020;
  • employees who are on sick leave or self-isolating should get statutory sick pay, but can be furloughed after this. This would suggest that an employer cannot place an employee who is and remains on sick leave onto furlough to improve their pay.

How does the Scheme work?

A portal system will be set up to claim for 80% of furloughed employees’ usual monthly wage costs, plus the associated employer national insurance contributions and minimum automatic employer pension contributions on that wage.

While on furlough, the employee’s wage will still be subject to the usual income tax and other deductions. Enhanced earnings related contractual pay for women on maternity leave is included as wage costs that can be claimed through the Scheme. The same applies for contractual entitlements to adoption, paternity or shared parental pay.

The Guidance sets out numerous pieces of information which employers require to have to hand when making their claim under the Scheme, which includes their ePAYE reference number, the number of employees being furloughed, the claim period (start and end date), the amount claimed and other bank and contact information.

Employers can only submit one claim at least every 3 weeks.

To be eligible for the subsidy, employers should write to their employee confirming that they have been furloughed and keep a record of this communication.

Furloughing employees

Employers must remember that the use of the Scheme and the Guidance is no substitute for following proper process – employees continue to enjoy their employment law rights during the COVID-19 pandemic crisis and the same must be properly observed when deciding which employees to furlough and during furlough.

Indeed, before furloughing any employee at all, employers need to ensure they undertake fair, objective and non-discriminatory processes. Such processes for furloughing an employee or employees will probably involve as a minimum:

  • Warning employees of the situation and the possibility of employees being furloughed;
  • Undertaking an objective, fair and non-discriminatory selection of employees to furlough or who are at risk of being furloughed;
  • Undertaking as much consultation as is practicable and reasonable in all of the circumstances (both collective with Unions and/or employee representatives and individual employees would seem sensible and may be necessary in some workplaces or situations);
  • Reaching a fair and non-discriminatory decision on who to furlough;
  • Seeking the agreement of the employee or employees to being furloughed and/or the pay arrangements that will exist during their period of furlough. If agreement cannot be reached, which may be unlikely in the current circumstances, further processes may need to be followed about which advice is best sought in the circumstances of each case as it will often depend upon numerous circumstances, including the terms of each employee’s contract of employment and the prevailing policies of the employer;
  • Notifying employee or employees of the decision. Even if this is done verbally with the employee to explain matters, this and the employee’s status must always be confirmed in writing in accordance with the terms of the Guidance to benefit from the Scheme;
  • At every step of the process, the taking and keeping of proper and complete written records and, where agreed by the employee, the employee’s signature obtaining their approval of the accuracy of those documents.

The Guidance

The full guidance can be found here and is a must read for any employer looking to benefit from the terms of the Scheme. Further details as to the application of the Scheme are to be found in the Guidance and must be considered by employers.  The Guidance provides details on how to calculate what can be claimed under the Scheme. 


These are difficult times for employers and employees and it is important to keep up to date. There are still unknowns and it is likely there will be teething problems that require to be ironed out when the Scheme comes into force. Only the fullness of time will tell.

Therefore, it remains important for employers and employees to keep abreast of the frequent updates and guidance as and when they arise to ensure that employers are making proper and lawful use of the Scheme.

The above is not intended to be a blanket guidance or legal advice and should not be relied upon as such. It is important to remember that each case is different, so specific legal advice tailored to your own circumstances needs to be sought before taking any steps or furloughing employees.

At Trinity Chambers, regardless of which side you are on, we are able to provide support tailored to meet your needs and circumstances. We are committed to remote working and are able to provide assistance across a wide range of employment issues.


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