These are very strange and uncertain times for businesses. The Government’s Coronavirus Job Retention Scheme (CJRS) was necessarily devised very quickly and as such it has been subjected to various clarifications and updates. It allows for employers to claim for a cash grant of up to 80% of a furloughed employees wages, capped at £2,500 a month. What do we know now?

The Treasury has issued a Direction to HMRC regarding payments to be made under the CJRS, please see link below.

The “Headlines” are: 

  1. employees who were employed on 19 March 2020 (previously 28 February 2020) are eligible for furlough, provided the employer had submitted real time information payroll data by that date (paras 3.2 and 5(a))

  2. the Scheme is not limited to those employees who would otherwise be made redundant.  It applies to any who are furloughed “by reason of circumstances as a result of coronavirus or coronavirus disease” (para 6.1(c)).

  3. a director who is furloughed can only undertake work to fulfil a duty or other obligation arising from an Act of Parliament relating to the filing of company’s accounts or provision of other information relating to the administration of the director’s company (para 6.6). 

  4. to claim furlough, the employer and employee must have agreed in writing that the employee will cease all work (para 6.7).  

  5. There is a question regarding whether employers can ask that those on furlough take annual leave during their period of furlough. The general position appears to be that an employer can ask an employee to do so, but that annual leave must be paid at full rate, that is to say the 80% must be ‘topped up’ 

The significant challenge for Employers will be what to do when the restrictions begin to be lifted. What about social distancing in offices? Will their need to be redundancies? There are no easy answers, but it will be a Brave New World after lockdown. 

The contents of this article do not constitute legal advice and are provided for general information purposes only.



The contents of this post do not constitute legal advice and are provided for general information purposes only