After much speculation, the Government has now released more detailed guidance on the Job Retention Scheme which can be found at

This update provide is a guide and aims to answer questions our clients have been asking. Please note that the Government has still not published the actual legislation. Whilst the new guidance is helpful, there is still much uncertainty. The legislation should provide the fine details and we will produce a further update when the legislation is available. That could impact on the contents of this guide.

The headline features of the Job Retention Scheme:

Howard Lewis-Nunn
Commentary by Howard Lewis-Nunn
  1. The scheme is available to all employers provided their employees were on the payroll on or before 28th February 2020. This means new starters are not eligible.
  2. Anyone dismissed by reason of redundancy after 28 February can be reinstated and furloughed, backdated as far as 1 March 2020.
  3. Employees must not work for you during a period of furlough (which must be for a minimum period of 3 weeks).
  4. The scheme will run for at least 3 months from 1 March, so until 31 May 2020, but may be extended by the Government.
  5. Furlough (as well as the amount to be to be paid whilst furloughed) must be agreed with employees, it cannot be unilaterally imposed. The agreement needs to be recorded in writing and a record kept.
  6. At a minimum, employers must pay a furloughed employee the level of the Government contribution to be eligible for the grant.
  7. The Government contribution is 80% of gross wage costs (this excludes fees, commission and bonuses) up to a maximum of £2,500 per month per furloughed employee. The Government will also cover employer national insurance and compulsory employer pensions contributions on top. To be clear £2,500 is the ceiling on the Government contribution, meaning the highest salary for which the Government contribution will cover the full 80% is £37,500.
  8. All usual deductions apply for income tax, national insurance and auto enrolment employee pension contributions.
  9. Employers will use an online portal to apply with the scheme expected to be up and running “by the end of April”.

Your Questions Answered

1. Can an employer ask for volunteers to be furloughed?

In short, yes.

2. If an employee is on unpaid leave, can they be furloughed?

Yes, provided that that the period of unpaid leave started after 28 February 2020.

3. Can an employee on sick leave or who is self-isolating be furloughed?

The guidance says that those employees who are on sick leave or self-isolating should get SSP. However, they can be furloughed after this. This does seem to suggest that the Government grant will not be available if an employer moves someone from sick or self-isolating to furlough when the employee remains sick or in the period of self-isolation and their SSP entitlement has not expired.

4. Can an employee who is on holiday be furloughed?

Unfortunately, this is a grey area and it’s not clear from the guidance.

This might be possible, but the danger if it isn’t permitted is that employees who take “holiday” are not deemed to be furloughed. This could potentially render an entire block of furlough period ineffective. To mitigate this potential risk, employers may choose to designate a period as holiday only after an initial three weeks of furlough has elapsed, and thereafter ensure there are always at least three-week blocks of furlough in which none are designated as holiday.

5. What about holiday pay during furlough?

Again, the guidance is silent on holiday and holiday pay.

6. Will an employee on furlough leave be able to take a second job during the hours that they would have been at work?

Subject to any restrictions in the employment contract there does not appear to be any restrictions on the employee undertaking work for another employer during the period of furlough.

7. Will an employee on maternity leave or other statutory family leave be able to agree a period of furlough leave?

The guidance says that if an employer offers enhanced (earnings related) contractual pay to women on maternity leave, this is included as wage costs that the employer can claim through the scheme.

This suggests that an employee may not need to bring maternity leave to an end to be in a furlough arrangement with their employer.

However, the position is unclear from the guidance.

8. What about working parents who find it difficult to attend work?

It is possible for employers to select parents who find it difficult to attend work particularly if working parents volunteered to be furloughed. However, this is again subject to employees

agreeing to being furloughed and for employers to demonstrate that there is no work for them to do. Employers should not simply furlough an employee just because they are finding it difficult to attend work or work from home effectively due to childcare. Employers should be able to show that currently they have no need for them to work.

9. What fair selection process does an employer need to follow or demonstrate where only part of the workforce will be asked to agree a period of furlough leave?

It’s a good idea for the employers to demonstrate a clear reason for deciding that furlough should apply to particular groups of employees. If decisions need to be made between employees doing the same role, remember furlough will have to be agreed with each employee. If an employee is asked and agrees to furlough, the scope for them to raise any legitimate grievance is limited. If they felt this was unfair on them, they could refuse.

Concerns are likely to be when or if redundancies are needed after furlough comes to an end and those selected for furlough become those selected for redundancy. This is when employees may assert that the decision on redundancy was pre-determined and unfair. It is crucial that employers ensure that they adopt a normal redundancy process with proper pooling, criteria and selection when it comes to actual redundancies after furlough.

Given the circumstances, it may not be possible for the employer to have the time and resources to undertake such a process before choosing employees to approach for furlough. Employers should be careful not to discriminate in making their selection.

10. What is the minimum time period an employee must be furloughed?

An employee must be furloughed for a minimum period of 3 weeks in order to be eligible for the Government scheme. The employee can return to work after three weeks provided this is agreed with the employee and there is provision in the furlough agreement. The employee can be furloughed again at a later date which would also need to be for a minimum of 3 weeks.

11. If an employee is on leave during a period of notice of dismissal, can they be placed on furlough?

This is not clear and we’re waiting for legislation to clarify this. The guidance provided thus far suggests that provided work is not available to be done, then furlough is available, even if the employee is being dismissed in any event during the furlough period. The position, however, remains uncertain.

Also, the furlough status needs to be agreed with the employee. During the dismissal period, the employee is entitled to full pay. Therefore, there may be little to encourage an employee to agree to furlough and reduced pay.

The larger the salary, the less likely it may be that someone will agree furlough.

12. Can ex-employees made redundant after 28 February 2020 be reinstated and designated as furloughed?


13. Will those employees who are furloughed continue to accrue their holiday entitlement?


14. If an employee is on holiday, can they be furloughed?

This is not clear from the guidance.

15. Can employees volunteer whilst furloughed?

A furloughed employee can take part in volunteer work or training, “as long as it does not provide services to or generate revenue for, or on behalf of” the employer.

Therefore, they could not offer to work free of charge or on a voluntary basis for their employer.

Employees are also able to provide voluntary services elsewhere whilst furloughed.

16. What do employers need to submit to HMRC?

Employers are required to submit form HR1. This is only once the employer proposes to dismiss at least 20 employees at one establishment in the next 90 days.

17. What notice should be provided to an employee to end the furlough?

The guidance is silent on this and it will very much depend on the terms that you agree with your employee when furlough leave commences. Employers should ensure their employees sign a furlough agreement which sets out the terms of their absence and including provisions to return to work and flexibility around furlough.