Still foggy over Furlough? A Q&A for Employees

For any employers or employees who have questions around the furlough scheme, we hope you find this Q&A blog helpful. This blog was last updated on the 4 March 2021 with the most recent questions added at the end of the article.

On 3 March 2021 the CJRS was extended until September 2021.

Please note the situation is changing regularly.

More Employment & HR blogs on furlough and other topics can be found here.

What is furlough?

The Coronavirus Job retention Scheme (CJRS) originally allowed employers to put those who were on their PAYE payroll as at the 19 March 2020 (updated date as at 15 April 2020) on a period of leave without work (known as furlough leave) and claim 80% of their wages (subject to a maximum cap of £2500 per month) from the Government as a grant (meaning they do not need to repay it). 

The Scheme is designed to help support employers whose operations have been severely affected by coronavirus to help them retain their employees and protect the UK economy. Claims could be back-dated to 1 March 2020 (provided employees were not undertaking work at this time) and the application portal opened on 20 April 2020 with the first payments of the grant due 30 April 2020.

Initially, the last date an employee could have been entered onto the scheme was the 10th June 2020 however, employees who had been on long-term family-related leave can be placed on the furlough scheme after the cut-off date. This could only be done if the employer has previously furloughed employees in the company. An agreement must be made between the employer and employee in writing. 

Grants could be claimed for a period of furlough up to 30 July 2020 (this was extended from June 2020). From August 2020 the government made amendments to the scheme, with employers being asked to contribute to the cost and with some part-time working being permitted in addition to some furlough leave (referred to as flexible furlough). It was initially due to continue in a revised form from August 2020 to the end of October 2020.

On 31 October 2020 major changes to the support available to employers and employees alike from November were announced as tougher lockdowns across the UK are introduced.

On 13 November 2020 the treasury guidance concerning the furlough scheme extension to March 2021 was issued.

The government has postponed the introduction of the Job Support Scheme (both Open and Closed Schemes) which was due to replace the CJRS and extended the CJRS (furlough).

From the information currently available on the extended scheme from November 2020 we know:

• For claim periods running from November to January 2021, employees will receive 80% of their usual salary for hours not worked, up to a maximum of £2,500 per month. This mean that the scheme is more generous than the scheme running in September and October. Employers can claim even if they have not previously used the CJRS or if an employee has not previously been furloughed
• Flexible furlough is still permitted i.e. employees can continue to do some work
• Calculations as to pay while on furlough will be the same for those who have been previously furloughed
• Employees furloughed for the first time from November will have a different pay/hours reference period. For fixed pay employees pay will be based on 80% of the wages payable in the last pay period ending on or before 30 October 2020. For those who have variable wages employed after 20 March 2020, the average of tax year 2020-2021 and the day before the furlough periods begins will be used. Further guidance is awaited in relation to pay reference periods
• The amount payable will be reviewed in January 2021
• A furlough agreement must be in place before an employee can be placed onto furlough leave, you cannot retrospectively put an agreement in place
• The CJRS Bonus that was due to be payable of £1000 per employee who was not on a redundancy notice 31 January 2021 has been withdrawn
• From 1 December 2020 you cannot make a claim in respect of an employee who is serving a contractual or statutory notice period

This means any agreement for the open and closed JSS will be invalid as the scheme has been postponed and is not operational. Updated furlough agreements should be issued by employers.

Can my employer cut my pay to 80% without consulting me first?

No. Your employer should seek your agreement to cut your pay, this should be in the form of a written agreement. If they don’t it is likely to amount to an unlawful deduction of wages and a breach of contract meaning you would have a legal claim. If you refuse to reduce your pay so that your employer can claim all of your pay through the scheme there is a risk that you will be made redundant or some other clause in your contract will be exercised such as the right to lay-off or short-time working.

Can I decline to be furloughed?

If there is no contractual right to furlough you in your contract of employment then yes you can decline. However, there is a risk that your employer would be forced to make you redundant and/or to exercise some other clause in your contract such as the right to lay off or short-time working (if one exists). At times like these, we would highly recommend flexibility and good communication from both employers and employees.

Can my employer contact me while I am furloughed?

Yes, your employer can contact you provided it is not for the purpose of working and or generating any revenue for your employer. For example, your employer could contact you to ask how you are or to let you know when you should return to work.

You can also undertake training for your employer when you are on furlough provided it is not used by your employer to generate an income. For any training, you undertake you must be paid at least the National Minimum Wage, which could be less than your usual hourly rate of pay.

How long does extended furlough last for, can it be extended or withdrawn?

We believe it will run until at least September 2021 but it is not yet clear how long it will last past that date if at all or if the new JSS will be imposed. 

The announcement to extend the scheme until September 2021 stated that:

• The scheme will run the same until the end of June covering up to 80% of employees’ wages up to a cap of £2,500 per month
• Employers will have to make a 10% contribution of the hours not worked in July
• Employers will have to make a 20% contribution of the hours not worked in August and September  

While on furlough will my wages be paid the same way?

Yes, payment should run through the usual payroll. However, your employer can only claim a grant for 80% of your gross wages subject to a maximum of £2500 per month, whichever is the lower. The amount an employer can claim may change in January 2021.

What happens if I have a period of annual leave during the furlough period?

The current guidance suggests that periods of annual leave should go ahead, and payment for annual leave should be paid at the usual rate of pay and not the 80% furlough rate of pay. You can read our blog on annual leave and Covid-19 here.

I started work after 28 February 2020, can I be furloughed?  

On 15th April 2020, the HMRC published its fourth version of the Job Retention Scheme. This update changed the qualification date to 19th March 2020 from 28th February 2020. This means that those who were employed and on payroll from THIS date can now be furloughed subject to agreement with the individual. For those employed after this date, unfortunately, furlough is not applicable to you (unless you TUPE transferred into your new employers employ).

For the extended furlough period from 1 November 2020, your employer needs to have submitted real-time PAYE information in relation to payments for you by 23.59 on 30th October 2020.

Once furloughed can I come back to work and how much notice should be given to me?

Yes, you can return to work following a period of furlough. However, the guidance does not set out how much notice should be given for you to return to work. As you remain employed, you should ensure you are always free to return to work as your employer could require you to return to work at short notice. If you are unable to return due to sickness, self-isolation or shielding you should inform your employer as soon as possible.

Do I need to adhere to the company regulations whilst furloughed e.g. with regards to a social media policy?

Yes, you remain employed and you should adhere to company policy and procedure. Your employer could discipline you in the usual way for non-adherence.

Can I take on paid work elsewhere while furloughed?

Yes, you can work elsewhere while on furlough provided the employer is not a linked or associated employer. However, you must check your contract as your employer may have included restrictions within it which forbid your working elsewhere. You must also ensure you are available to return to work for your employer from a period of furlough.

Can I be made redundant after a period of furlough?

Redundancy and furlough are two separate processes. If you have volunteered for furlough this does not put you at increased risk of redundancy.

There is nothing that prevents an employer from making redundancies following furlough. However, employers must comply with the law in relation to dismissals for redundancy. Therefore, if you are put at risk of redundancy you should take legal advice.

Can I be furloughed from more than one job?

Yes, you can.

I am a zero-hour worker how is 80% of my income calculated?

Under the extended scheme we believe for zero hours works pay will be calculated at the same rate as they were when previously furlough or if they have not been previously furloughed it will be based on:

• the average payable between the start date of their employment or 6 April 2020 (whichever is later) and the day before their extension furlough periods begins

However, the full guidance has yet to be published.

We understand the Job Retention Bonus (which was due to be paid in February for employees kept on until January 2021 and not under notice of termination) has now been postponed so it will not be paid to eligible employers in February 2021.  

I was made redundant before furlough was introduced can my old employer furlough me?

Under the original rules yes, provided you were on the employer’s books as at 19 March 2020 and the employer agrees to take you back on. However, your former employer does not have to agree to this.

Under the extended scheme employees that were employed and on the payroll on 23 September 2020 who were made redundant or stopped working for their employer after that date can be re-employed and claimed for.

Will furlough affect annual leave entitlement?

The statutory minimum of 5.6 weeks' leave under the Working Time Regulations 1998 continues to accrue during furlough. In relation to additional contractual annual leave, this will depend on what your contract states but it is highly likely to still accrue.

Annual leave can be taken during a period of furlough without breaking the continuity of the three weeks minimum furlough period. If it has not been reasonably practicable for you to take annual leave due to the coronavirus pandemic you can carry over 4 weeks of annual leave into the next two annual leave years.

Your employer can require you to take annual leave during a period of furlough. However, they must take into account whether any restrictions you are under, such as self-isolation, prevent you from resting, relaxing and enjoying leisure time, which is the fundamental purpose of annual leave. They also have to give you at least double the amount of notice of the leave they require you to take e.g. if they want you to take one days' leave they must give 2 days’ notice.

Annual leave should be paid at your normal rate of pay if your salary is fixed or should be paid at the rate of your average pay over the last 52 weeks if your hours vary. 

If a bank holiday falls inside a period of furlough and you would have usually worked the bank holiday furlough leave is unaffected. If you would have usually have had the bank holiday as annual leave and you are on furlough, there are two options:

• The bank holiday may be taken as annual leave and must be paid at 100% pay for annual leave or
• In agreement with the employer, the leave can be deferred until a later date

I have not been put on furlough leave but some of my colleagues have, is this fair?

It may seem unfair that some employees will be required to continue working potentially increasing the risk of infection if work cannot be carried out from home. However, it is for your employer to decide who should be furloughed. Provided non-discriminatory selection criteria was used it will be difficult for you to challenge their decision.

I cannot work from home and my employer has said I must continue to attend the workplace. Can I insist on being furloughed?

It is understandable that many employees are concerned at present about continuing to attend their workplace due to concerns about the Coronavirus. However, if your employer is continuing to operate and you cannot work from home, you cannot insist your employer places you on furlough leave, it is for the employer to determine whether there is a need to use the scheme.

There has been legislation passed in Wales which makes employers take all reasonable measures to comply with social distancing requirements which should be reassuring for employees across Wales.

If you are concerned about the safety of your workplace, we recommend you take legal advice which is tailored to your individual circumstances as there is legislation in place to protect individuals who are concerned about the safety of the workplace but whether it applies will depend on the facts.

I have received a letter from the Chief Medical Officer advising me to shield, what are my options in regards to working?

If you have this letter you should provide a copy to your employer. If you cannot work from home, the current guidance suggests your employer can offer you a period of furlough leave to assist you in complying with the measures that have been recommended to protect your health during the pandemic.

Under the extended scheme, we understand employees can still be furloughed if they are shielding in line with public health guidance (or need to stay at home with someone who is shielding).

A separate blog about shielding and annual leave can be found here.

After my agreed furlough leave is over, can I refuse to return to work?

You should be ready to return to work following a period of furlough. If you have concerns about returning to work you should discuss them with your employer prior to your planned return date. If your employer has made a request for you to return to work following furlough and you refuse to do so you could face disciplinary procedures. If your refusal is linked to concerns over your own health and/or the health and safety of someone else you should take legal advice about your options. If you are unable to return to work because you are unwell you should inform your employer and comply with your employers' sickness absence reporting procedures.

Will I still be taxed on my company car as a benefit in kind whilst on furloughed leave?

At JCP we would always recommend speaking to your accountant about anything do so with employee benefits and tax, so we asked Rachael Ball, Associate Tax Director at Baldwins Accountants to answer this question for us. Rachael said:

"Whilst you have your company car, it is available for private use even with the current travel restrictions that we have in place. As such, a benefit in kind for the provision of a company car still exists. What can be done to prevent a BIK arising when a car is not being used? A car has to be unavailable for a minimum period of 30 ‘consecutive’ days to be classed as unavailable to you. The car has to be unavailable to you and not simply a case of you being unable to use the car. HM Revenue & Customs have confirmed that they would accept that a car is unavailable where the keys are kept in the possession of the employer and the employee has no authority to request that the keys are returned to them and are unable to gain access to the car. If you were to send the keys back to your employer until things return to normal and make sure that everything is clearly documented and evidenced should HMRC want to check the circumstances in future, this should be sufficient to reduce the taxable benefit in kind during this period."

In July I will return from 12 months maternity leave, can my employer still furlough me?

If your period of maternity leave started before 10 June 2020 and ended after 10 June 2020 and you were on your employers PAYE payroll on or before 19 March 2020 (an RTI submission must have been made for you on or before this date) your employer can furlough you with your consent and claim a grant under the CJRS.

We are waiting for guidance on this under the extended scheme.

How will my pay be calculated for furlough when I return from Maternity Leave?

If your pay was fixed prior to maternity leave the guidance states that your employer should calculate your pay by reference to your salary, rather than the pay you received while you were on family-related leave.

If your pay varies, the guidance states that your employer should calculate your pay using either the same month's wages from the previous year or your average monthly wages for the 2019/2020 tax year, whichever is higher.

My employer has mentioned part-time furlough, what does this mean and is it legal?

From 1 July 2020 employers, with the consent of their employees, are permitted to furlough employees on a part-time basis. For example, if an employer only requires its full-time employees for part of the week they are permitted to ask their employees to work to suit its requirement and furlough them for the remainder of the week. Employers can still claim a grant (subject to 80% of wages to a maximum of £2500) and employer NI contributions and pension contributions to pay employees for the time they are on furlough.

If your employer requires you to work on a part-time basis and be furloughed for rest of the week, you should be paid full pay for the hours/days that you are working and are not on furlough.

For most employers having the option to furlough staff has provided a huge relief during these uncertain times.  We cannot stress enough how important it is to communicate, communicate, communicate. Employers and employees alike are finding this a very uncomfortable scenario and whilst the loss of earnings could cause some financial hardship, we would encourage employees where businesses have acted within the law and not discriminated, to support their employers so that they will be able to weather this storm and come out the other side with as minimal impact as possible and with jobs for their workforce in the future.

We hope that these questions have been useful. For straight forward questions, we would always recommend consulting the ACAS website here or getting in contact with your local Citizens’ Advice.

If neither are able to help then for further information please contact Catherine Almeida on 02920 379570 or email catherine.almeida@jcpsolicitors.co.uk.

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