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Furlough Leave: FAQs

Q: What is ‘furlough leave’?

A: “Furlough leave” was created by the government’s Coronavirus Job Retention Scheme. The purpose of the scheme is “to help employers whose operations have been severely affected by coronavirus (COVID-19) to retain their employees and protect the UK economy”.

If employers cannot maintain their current workforce, they can furlough employees (i.e. send them home, keep them on the payroll but not give them any work) and apply for a grant that covers 80% of their usual monthly wage costs, up to £2,500 a month, plus the associated Employer National Insurance contributions and minimum automatic enrolment employer pension contributions on that wage.

Q: Do I have to top up employees’ pay to 100%?

A: No.

Q: How long will the scheme last?

A: On 12 May 2020, Chancellor Rishi Sunak announced the extension of the furlough scheme until the end of October 2020. The scheme will continue in its current form until the end of July, with the government paying 80% of furloughed employees’ wages. From August, employers will be required to share the cost of the scheme (remaining at 80% of wages at a maximum of £2,500 per month) with the government until the scheme ends in October.

Mr Sunak also confirmed that from August the scheme will provide for greater flexibility, allowing employees to return on a part-time basis in order to support the transition back to work. Details of the scheme changes, including how payment of wages will be apportioned between employers and the government,  will be confirmed at the end of May.

Q: Can employees do any work for me during furlough leave?

A: Not currently. If they work for you at all during furlough leave, they will not be eligible to participate in the scheme and you will not be entitled to the government grant to cover their wages.

However, they can undertake training or do volunteer work, provided they do not provide services to or make any money for you.

From August, employees will be able to do some work, which will be clarified by the government before the end of May.

Q: Can employees do training during furlough leave?

A: Yes, furloughed employees can engage in training, as long as they are not providing services to or generating revenue for their employer in doing so. 

If you ask furloughed employees to undertake training, you must pay at least their appropriate national minimum wage for this time. You must, therefore, ensure that the furlough payment provides sufficient monies to cover these training hours. If not, you will need to pay the additional wages to ensure at least the appropriate minimum wage is paid for 100% of the training time.

Q: Can my employees work for others during furlough leave?

A: Yes, subject to the terms of their contract with you.

If you allow them to start a job with another employer while furloughed by you, you may want to agree restrictions with them, e.g. they can only do the new role during the furlough period but must then leave that job.

Recent government guidance made clear that employees cannot work for organisations that are “linked or associated” to you when on furlough.

Q: What rights do employees have during furlough?

A: Furloughed employees continue to have statutory rights, including Statutory Sick Pay entitlement, maternity rights, other parental rights, rights against unfair dismissal and to redundancy payments.

Please also refer to the separate section below regarding Holiday and Furlough.

Q: How long can I furlough employees for?

A: Employees must be furloughed for a minimum of 3 consecutive weeks. Furlough can continue while the scheme remains in place.

Q: Can a period of furlough be extended?

A: Yes. On 30 April 2020, the government confirmed that each period of furlough can be extended by any amount of time whilst the employee is on furlough.

Q: Can disciplinary and grievance procedures be conducted during furlough?

A: Yes, subject to some caveats.

On 6 May 2020, ACAS issued guidance for employers on how to handle disciplinary and grievance procedures during the pandemic, including where the employees involved may be on furlough. Some of the key principles are:

  • Consider whether a fair and reasonable procedure can be conducted where individuals involved are away from work.

Consider the circumstances and sensitivity of the case, whether anyone objects to the procedure going ahead during this time, if the procedure can be conducted in line with the current public health guidance and the health and wellbeing of the employee(s) involved.

  • If the procedure does go ahead, consider using video meetings to conduct investigation interviews and hearings, determining if it can be done in a fair way, including whether:
    • the employee has access to technology;
    • there are any disability or accessibility issues;
    • witness statements and/or any other evidence can be clearly viewed by all involved;
    • evidence can be fairly assessed and questions given in a video meeting;
    • all evidence needed to conduct the procedure can be obtained; and
    • the person under investigation or who raised the grievance can be accompanied.
  • A person on furlough might take part in a disciplinary or grievance procedure if they are under investigation, have raised a grievance or are a witness at a hearing.
  • Employers must follow ACAS’s Code of practice on disciplinary and grievance procedures, even during these unprecedented times. Employment Tribunals will look at whether employers acted in a fair and reasonable way in the circumstances.
  • An employee still has a right to be accompanied at remote meetings and the same procedure should be followed in relation to companions, e.g. the companion may sum up the employee’s case, respond on behalf of the employee and talk privately to the employee at any time during the meeting. If a companion is unable to attend, the employee has the right to suggest an alternative reasonable date and time.
  • There is no reason to record a meeting held remotely.



Q: Which businesses are eligible?

A: The scheme is open to all organisations with a UK payroll and UK bank account, including businesses, charities, recruitment agencies and public authorities, provided that the organisation created and started a PAYE payroll scheme on or before 19 March 2020 and has enrolled for PAYE online before claiming the grant.

Where a company is in administration, the administrator of the company can also access the scheme but should only do so if there is a reasonable likelihood of rehiring the workers.

Q: Which workers are eligible?

A: The scheme applies to individuals on PAYE payroll on or before 19 March 2020 and who were notified to HMRC on an RTI submission on or before 19 March 2020.

It covers individuals on any type of contract, including full or part-time basis, fixed term, zero hours, agency or flexible.

The government guidance also includes office holders (including company directors), salaried members of Limited Liability Partnerships, agency workers (including those employed by umbrella companies); and “limb

(b) workers”, namely non-employees who satisfy the definition of ‘worker’ in S.230(3)(b) of the Employment Rights Act 1996, provided that they are paid via PAYE.

Q: Is furlough available for company directors with an annual pay period?

A: Yes. On 30 April 2020, HMRC confirmed that they are eligible, provided they meet the relevant conditions, including being notified to HMRC on an RTI submission on or before 19 March 2020, which relates to a payment of earnings in the 19/20 tax year.

This would usually cover one-person businesses whereby most of the revenue is taken as dividends.

Q: Is furlough available for those on short-time working?

A: No. A key requirement of furlough is that the employee must not undertake any work for the employer.

Q: Can I furlough new starters, if I have no work for them?

Not unless they were on your payroll and you made an RTI submission for them on or before 19 March 2020.

If not, you can either agree with them to defer their start date or pay them the notice period required to terminate their contract.

Q: Can I furlough apprentices?


They will also be permitted to continue undertaking the study element of their apprenticeship while on furlough and to be paid at least the Apprenticeship Minimum Wage, National Living Wage or National Minimum Wage for all the time they spend training.

Q: Does furlough leave also apply to directors and owner managers?

A: Yes, provided that they are on PAYE payroll and an RTI submission was made to HMRC in respect of them on or before 19 March 2020.

Government guidance has confirmed that furloughed directors can still “carry out particular duties to fulfil the statutory obligations they owe to their company…provided they do no more than would reasonably be judged necessary for that purpose, i.e. they should not do work of a kind they would carry out in normal circumstances to generate commercial revenue or provides services to or on behalf of their company”.

The wording in the Treasury Direction is slightly narrower than the guidance and only allows “work undertaken by a director of a company to fulfil a duty or other obligation arising by or under an Act of Parliament relating to the filing of company accounts or provision of other information relating to the administration of the director’s company”, so directors should tread carefully regarding what and how much they do for their companies while furloughed.

Q: Can I furlough employees if they are on notice or garden leave?

A: Yes, but you would need their consent. There may be little incentive for them to agree to be furloughed, especially if you do not propose to top up their notice pay to normal pay (but please see notice pay question below).

Q: What notice pay should I pay to employees who are serving notice while on furlough?

A: Whilst this should be a simple question, unfortunately it isn’t! There is no clear guidance on this, and employment law experts hold different views regarding whether a furloughed employee should receive their “furlough wages” or “normal” pay during a notice period while on furlough.

There appear to be two possibilities, based on employment law principles, which I have simplified as far as possible below.

1st possibility

This is based on some complex sections in the Employment Rights Act, which address what level of notice pay an employee should receive if they are “absent” from work during their notice period.

These sections apply where an employee is:

  • “ready and willing to work but no work is provided for him by his employer”;
  • “incapable of work because of sickness or injury”;
  • “absent from work wholly or partly because of pregnancy or childbirth” or various forms of statutory family-related leave; or
  • absent from work on holiday.

Furlough leave may well fall within the first category, as no work is provided by the employer, although it is possible that a furloughed employee may not be “ready and willing to work”, for example, if they have asked to be furloughed because they would prefer to be at home (but they are not shielding or otherwise unable to work).

If a furloughed employee does fall within this, the level of notice pay they receive during furlough will depend on how the notice period in their employment contract relates to their statutory minimum notice period. (Statutory minimum notice is one week’s notice for up to two years’ service and then one week per year of service):

  • If the employee’s contractual notice entitlement is less than one week more than their statutory minimum notice period, they are entitled to “normal” pay during their notice period. (Please see below for what I mean by “normal”!)

For example, an employee with 4 years’ service (and would, therefore, be entitled to 4 weeks’ statutory minimum notice) who has a 4-week contractual notice period will be entitled to normal pay during notice, rather than furlough pay, despite having agreed to be on reduced furlough wages.

  • If the employee’s contractual notice entitlement is at least one week more than their statutory minimum notice period, they are not entitled to “normal” pay during their notice period.

For example, an employee with 4 years’ service (and would, therefore, be entitled to 4 weeks’ statutory minimum notice) who has a 3 month contractual notice period will only be entitled to their 80% furlough pay during notice, rather than normal pay. 

“Normal” pay is based on a complex calculation relating to a “week’s pay” as follows:

  1. For employees with “normal working hours” where pay does not vary based on the amount of work done, a “week’s pay” is the amount payable on the day before notice was given.

If the employee has agreed to vary their contractual salary entitlement to 80% furlough pay, a “week’s pay” will be based on that.

2. For employees with “normal working hours” where pay does vary with the amount of work done, a “week’s pay” is the average pay over the 12 weeks before notice was given.

Depending on the length of the notice period, that may involve averaging out some non-furlough weeks (at 100%) and furlough weeks (at 80%).

3. For employees without normal working hours, the calculation is the same as in (b) above.

Clear as mud?!

2nd possibility

It has been suggested by some that, even where an employee is only entitled to be paid at 80% during their notice period in the scenarios outlined above, an Employment Tribunal might look for a “creative” way to find that an employee should receive 100% pay during their notice period!

Q: Can I furlough employees who were on unpaid leave prior to 19 March 2020?

A: No.

Q: Can I furlough employees who are currently on unpaid parental/dependants’ leave?

A: Yes, if they went on unpaid leave after 28 February 2020.

If an employee went on unpaid leave on or before 28 February, you cannot furlough them until the date on which it was agreed they would return from unpaid leave.

Recent government guidance also allows you to furlough individuals who are unable to work because they have caring responsibilities resulting from coronavirus (COVID-19), e.g. employees that need to look after children.

NB If you furlough them (after the date they were due to return from unpaid leave), their furlough pay should be based on

  • their gross salary, not the pay they received whilst on unpaid leave; or
  • if they have variable pay, the higher of the same month’s earnings from the previous year or average monthly earnings for the 2019 to 2020 tax year.

Q: Can I furlough someone currently on or who was on a fixed-term contract?

A: Yes, provided that an RTI payment submission for the employee was notified to HMRC on or before 19 March 2020, unless the employee started and ended the same contract between 28 February 2020 and 19 March 2020.

Their contract can also be renewed or extended during the furlough period without breaking the terms of the scheme. Once the contract ends (because it is not extended or renewed), you will no longer be able claim the grant for them.

In addition, an employee who was on a fixed term contract can be re-employed, furloughed and claimed for if either:

  • their contract expired after 28 February 2020 and an RTI payment submission for the employee was notified to HMRC on or before 28 February 2020; or
  • their contract expired after 19 March 2020 and an RTI payment submission for the employee was notified to HMRC on or before 19 March 2020.

Q: Can I furlough someone who is working under a Visa?

A: Yes. Government guidance now confirms that grants under the CJRS are not counted as “access to public funds”, so employers are able to furlough employees on all categories of visa.

Q: What about agency workers?

A: Where agency workers are paid through PAYE, they can be furloughed and receive support through this scheme, including where they are employed by umbrella companies.

Furlough should be agreed between the agency, as the deemed employer, and the worker. As with employees, agency workers should perform no work for, through or on behalf of the agency that has furloughed them while they are furloughed, including for the agency’s clients.

Where an agency supplies clients with workers who are employed by an umbrella company that operates the PAYE, it will be for the umbrella company and the worker to agree whether to furlough the worker or not.

Q: What if I’ve already made an employee redundant?

A: You can rehire, place on furlough and then reclaim the wages of:

  • any employee who was on your payroll as at 28 February 2020 (i.e. they had been notified to HMRC on an RTI submission on or before 28 February 2020); and
  • who was made redundant or stopped working for you after 28 February 2020,

even if you do not re-employ them until after 19 March 2020.

You can also rehire, place on furlough and then reclaim the wages of:

  • any employee who was on your payroll as at 19 March 2020 (i.e. they had been notified to HMRC on an RTI submission on or before 19 March 2020); and
  • who was made redundant or stopped working for you after 19 March 2020.

Please note that if an individual has already left the business, you will need their consent to rehire and put them on furlough leave, but they are likely to agree/request if they do not have another job.

NB You can claim for their wages through the scheme from the date you furloughed them.

Q: What about furloughing employees who are due to go on maternity leave, already on maternity leave or returning from maternity leave?

A: Due to go on maternity leave

You can furlough someone who is due to go on maternity leave, provided your decision to do so is not discriminatory.

In normal circumstances, “average weekly earnings” (when calculating how much statutory maternity pay is payable) are based on earnings during the 8-week period prior to the qualifying week, and the qualifying week is the 15th week before the expected date of childbirth.

As a result, it appeared that pregnant employees who were furloughed before going on maternity leave might receive reduced maternity pay as a result

However, on 24 April 2020 the government announced that furloughed workers taking paid family-related leave (including statutory maternity, paternity, shared parental, parental bereavement and adoption leave) commencing on or after 25 April 2020 are entitled to receive pay based on their usual earnings rather than furlough pay. This ensures that their statutory pay will not be impacted by a prior period on furlough.

A: Already on maternity leave

If you want to furlough an employee during maternity leave, the position is as follows:

  • Where the employee qualifies for SMP only, she will continue to receive that entitlement (rather than furlough pay), namely:
    • 90% of her average weekly earnings in the first 6 weeks; and
    • 33 weeks of pay paid at the lower of 90% of their average weekly earnings or the statutory flat rate (currently £151.20 per week).

In light of this, an employee only receiving SMP may well ask to curtail her maternity leave, in which case she could then go on to furlough pay.

  • If an employee is entitled to enhanced maternity pay (over and above SMP), the employer can claim enhanced contractual pay via the furlough scheme. (The same principle also applies to enhanced adoption, paternity and shared parental pay.)

A: Returning from maternity leave

  • If an employee is furloughed on returning from statutory maternity leave (or statutory paternity, shared parental, adoption, parental bereavement or unpaid parental leave) after 19 March 2020, their furlough “wages” should be based on their gross salary, not the pay they received whilst on statutory family-related leave.

If the returning employee has variable pay, their furlough wages should be calculated using either the same month’s earnings from the previous year or average monthly earnings for the 2019 to 2020 tax year.

Q: Can I furlough employees returning to work after being on unpaid sabbatical or unpaid leave and, if so, how do I calculate their furlough wages?

A: If your employee has been on unpaid sabbatical or unpaid leave, you’ll need to use the amount they would have been paid if they were on paid leave when calculating 80% of their wages.

Q: Can I furlough someone who TUPE transferred to me after 28 February 2020?

Yes. On 30 April 2020, the government confirmed that a new employer can claim under the scheme in respect of employees of a previous business who TUPE transferred after 28 February 2020.

NB This date has shifted from 28 February 2020 to 19 March 2020 and then back again!

Q: If I engaged in a payroll consolidation scheme after 28 February 2020, can I furlough those employees?

A: Yes. On 30 April 2020, the government confirmed that where a group of companies have multiple PAYE schemes and there is a transfer of all employees from these schemes into a new consolidated PAYE scheme after 28 February 2020, the new scheme will be eligible to furlough those employees and claim the grants available under the CJRS

NB This date has shifted from 28 February 2020 to 19 March 2020 and then back again!



Q: What will the government reimburse?

A: Employers can currently reclaim 80% of a furloughed employee’s usual monthly wages, up to £2,500 a month, plus the associated Employer National Insurance contributions and minimum automatic enrolment employer pension contributions (3%) on that subsidised wage. (NB The amount employers can reclaim is due to change in August.)

When calculating 80% of employees’ “wages”, an employer should use “regular payments” they are obliged to make, including:

  • regular wages paid to employees;
  • non-discretionary overtime;
  • non-discretionary fees (this probably relates to “office holders”);
  • non-discretionary commission payments; and
  • piece rate payments.

Where an employee’s (contractual) overtime or commission varies each month (and, therefore, their total wages vary), they should be paid akin to the government guidance relating to “employees whose pay varies” (please see below).

Employers should exclude any payments made at the discretion of the employer or a client (namely, where the employer or client is under no contractual obligation to pay a sum), including:

  • tips;
  • discretionary bonuses;
  • discretionary commission payments;
  • non-cash payments; and
  • non-monetary benefits like benefits in kind (such as a company car) and salary sacrifice schemes (including pension contributions) that reduce an employee’s taxable pay.

NB Normally, an employee cannot switch freely out of a salary sacrifice scheme unless there is a “life event”. However, HMRC has confirmed that COVID-19 counts as a life event that could warrant changes to salary sacrifice arrangements, if the relevant employment contract is updated accordingly.

Q: Some of my employees recently received pay rises- can I use their previous salary?

A: For salaried employees, their gross salary as at 19 March 2020 should be used.

Q: What about employees whose pay varies during the year?

A: If the employee has been employed or engaged for 12 months, employers can claim for the higher of:

  1. the same month’s earnings from the previous year (i.e. April 2019 pay for April 2020); or
  2. the average monthly earnings from the 2019/20 tax year.

For employees with less than 12 months’ service, employers can claim for an average of the employee’s monthly earnings since they started work. For example, if the employee only joined in February 2020, then a pro-rata of their earnings so far should be used.

Q: What about the National Minimum Wage and National Living Wage?

A: As furloughed employees are not deemed to be “working”, the National Minimum Wage and National Living Wage do not apply.

As such, employees must be paid the lower of 80% of their salary or £2,500, even if this falls below the National Minimum Wage or National Living Wage.

An exception to this is that employees who are required to complete any training while furloughed must be paid the National Minimum Wage or National Living Wage for the time spent doing so, even if this means they are paid more than 80% of their salary.

Q: Is furlough pay still subject to the usual deductions?

A: Yes.Income tax, employee national insurance contributions, employee automatic enrolment pension contributions (unless the employee opts out or stops saving into their pension) and Student Loan repayments will continue to be deducted as usual.

Q: Can I stop paying employer NI contributions and/or the Apprenticeship Levy while employees are on furlough?

No. Employers must still pay Employer National Insurance Contributions and the minimum automatic enrolment employer pension contributions (3%) while employees are on furlough. However, you can reclaim these from the government.

The Apprenticeship Levy should continue to be paid as usual and will not be covered by the government grant.

Q: Can I stop providing/paying for contractual benefits while an employee is on furlough?

A: No, you must continue to provide these while employees are on furlough (in addition to their wages), unless they agree to waive these benefits.


Q: Although the government won’t cover the cost, is an employee still entitled to receive non-cash payments e.g. employee benefits such as free travel?


A: The employee remains entitled to receive those benefits whilst on furlough, unless you agree with employees that they will no longer receive these. This could be done via the furlough letter/agreement.

Q: Can I use the government grant towards statutory redundancy payments?

A: No. The guidance is clear that grants cannot be used to substitute redundancy payments, and that HMRC will continue to monitor businesses after the scheme has closed.



Q: What information do I need to give?

A: Detailed, updated guidance regarding how to calculate the sums to claim, what information to include and how to submit a claim is now available at:

Q: What date should I claim from?

A: Claims should be started from the date that the employee finishes work and starts furlough, not when you make the decision to furlough them or when you write to them to confirm their furloughed status.

Q: When will the portal be open to use and how quickly will I get the grant?

A: The government’s online portal opened today 20 April 2020.

HMRC has indicated that it will make payments 6 working days after submission of a claim.

Q: How often can I claim?

A: The latest guidance confirms that:

  • It is for you to decide the length of your claim period, which may be based on how frequently you run your payroll.
  • You cannot make more than one claim during a claim period- this means you should include all of the employees that you want to furlough for that claim period, because you will not be able to make another claim for the same period or one that overlaps.
  • You must claim for all employees in each period at one time – it is currently not possible to amend a claim once it is submitted. (NB HMRC are looking to develop a process to allow for amendments to be made.)
  • You can make your claim in anticipation of an imminent payroll run, at the point you run your payroll or after you have run your payroll.



Q: How do I furlough employees?

A: You must take the following steps

  1. Obtain written consent from your employees prior to placing them on furlough, whether via a furlough letter or agreement.

We have always advised that employers obtain written consent from employees prior to furloughing them, as furloughing amounts to a contractual variation (as employees will not be working and may only receive 80% of their wages). Employee consent should, therefore, avoid potential unlawful deduction from wages or constructive dismissal claims.

There was some confusion as to whether a written agreement with employees was required in order to claim the government grant, due to discrepancies between different versions of the government guidance and the recent Treasury Direction. However, HMRC have now clarified that they will “honour” the government guidance when processing employers’ claims. This states that:

“To be eligible for the grant, employers must confirm in writing to their employee confirming that they have been furloughed. If this is done in a way that is consistent with employment law, that consent is valid for the purposes of claiming through the scheme. Collective agreement reached between an employer and a trade union is also acceptable for the purpose of such a claim. There needs to be a written record, but the employee does not have to provide a written response.”

Employers must also keep a record of the above written communication (placing employees on furlough) for five years, in case of any future audit.

Regardless of the above, our view remains that the best approach is to obtain employees’ written agreement to be furloughed and to cease all work.

  1. Submit your claim on HMRC’s online portal, which opened on 20 April 2020. The link to the Government Gateway can be found at

Q: How do we choose who to place on furlough leave?

A: First, analyse what work there is and which roles are needed.

If the work of an entire team or department has disappeared, it would be reasonable to ask all of them to agree to being furloughed.  

If you require fewer people in a team or department and want to furlough some of them:

  • Ask for volunteers first.
  • If you are oversubscribed with volunteers:
    • you can explain that nobody has the right to be furloughed and that employees need to do what they can to help the business survive, otherwise there will be no jobs for any of them when this is all over; and
    • apply fair and objective selection criteria in deciding who stays and who is furloughed. A brief matrix selection might also be useful.
  • Where you make a deliberate selection, this could take you into the realms of potential discrimination (for example, age discrimination, if you choose older, more vulnerable employees; sex discrimination, if you choose those with child-care responsibilities). However, as long as you have a reasonable rationale to justify your selection, this should be fine. For example, it would be reasonable to prioritise over 70s for furlough due to the increased health risks for them.
  • As a “sweetener”, you could put the furloughed staff on the 80% minimum and, from the extra 20%, pay a bit of a “thank you” bonus to those who are still working. (This would be subject to a clear contractual agreement, and you could potentially arrange to pay this at a later date to help cashflow if needed.)
  • Pull names out of a hat!

Q: What do I do if an employee does not consent to being furloughed?

A: If consent is refused and unless a variation clause can be used (which is unlikely), you cannot place an employee on furlough against their will. In this instance, an employee will retain their right to normal contractual pay until an agreement is reached. Placing an employee on furlough without their consent and reducing their pay to 80% is likely to open you up to a number of claims.

In addition, you may have to trigger a collective consultation if more than 20 employees refuse to be furloughed and you intend to make them redundant instead. (If 20 or more employees refuse furlough, the consultation should last for a minimum of 30 days. If it is 99 or more employees, the consultation should last for a minimum of 45 days.)

Q: Do I need to carry out collective consultation if I am furloughing 20+ employees?

A: If you are simply trying to agree furlough, you should not need to carry out collective consultation at that initial stage.

However, if you are contemplating terminating and re-engaging 20+ employees (to change their terms and conditions) or you know that you will have to make 20+ redundancies at the end of the scheme, you may want to start collective consultation now, as you would need either 30 days (for 20+ redundancies) or 45 days (for 100+ redundancies) from filing the HR1 and starting consultation before you can issue notices of redundancy. Collective consultation can probably take place, or at least commence, during furlough leave as it is unlikely to constitute “work”.

If you do need to consult, think about how to practically do this, e.g. via Skype or Zoom.

You should also bear in mind that the (originally-stated) purpose of the scheme was to avoid redundancies. As such, it could be unreasonable and would almost certainly generate bad PR if you conclude consultation and decide to make redundancies during a furlough period, unless it is clear that redundancy is inevitable, e.g. if a site is closing.

Q: What if a furloughed employee has more than one job?

A:  An employee can be furloughed from a job by one employer and continue working for the other(s). In addition, an employee can be furloughed from each job, receiving 80% of their salary, up to a maximum of £2,500, per job.

Q: Can I rotate employees on furlough leave?

A: Yes

However, furlough must be taken in a minimum of 3-week blocks and employees cannot work at all during this 3-week period in order to be furloughed.

If you may want to place employees on furlough more than once or on a rotational basis, consider stating and seeking agreement to this in the initial furlough letter/agreement. This will prevent you from having to issue a fresh furlough letter/agreement each time you place them on furlough.

More employers may now decide to rotate employees on and off furlough given the extension of the scheme until October, in order to look after the physical, mental and emotional well-being both of:

  • employees who are still working, may have extra workload and conflicting childcare commitments and need a break; and
  • furloughed employees who may become disengaged during an extended absence from work.

Q: Can union or non-union representatives undertake duties for the purposes of individual or collective representation of employees or other workers while furloughed?

A: Yes. HMRC confirmed on 30 April 2020 that, as long as individuals are not providing services to/generating revenue for or on behalf of their employer, they can undertake duties and activities for these purposes e.g. accompanying a colleague to a disciplinary meeting whilst on furlough or participating in collective consultation.



Previous government guidance was unclear in relation to a number of points regarding sickness and furlough. However, the latest guidance has made the position much clearer- as set out below.

Q: Can I furlough employees who are on sick leave/self-isolating?

A: Yes and no!

You cannot furlough an employee who is on sick leave/self-isolating while they are in receipt of SSP.

BUT you can furlough an employee for business reasons, even if that employee is currently off sick. (NB Short term illness/self-isolation should not be a consideration in deciding whether to furlough an employee.) If you decide to furlough a “sick” employee, they should receive furlough pay, rather than sick pay.

You can also furlough an employee who is off on long-term sick leave (although you are not obliged to do so) or shielding.

Q: What if an employee on furlough leave becomes sick?

If an employee becomes sick while on furlough, they are entitled to SSP as a minimum. It is up to their employer to decide whether to:

o             keep them on furlough leave and pay; or

o             move them on to sick leave and SSP.

NB If an employer moves an employee on to sick leave and pay within a 3-week furlough period, this will “break” the furlough and the employer will not be eligible for the grant for that period.

Given that the government is funding all furlough pay (assuming an employer is paying 80% up to £2,500) but employers have to pay SSP (subject to possibly reclaiming 2 weeks’ SSP), it seems unlikely that employers will choose to move employees who become ill during furlough onto sick leave/pay.

NB An employer can claim back from both the CJRS and the SSP rebate schemes for the same employee but not for the same period of time (subject to satisfying the terms of both schemes). For example, if an employee is off sick on SSP for 2 weeks and then you furlough them for 3 weeks, you could claim a rebate of 2 weeks’ SSP and then the CJRS grant for 3 weeks.

Q: Can I furlough employees who are “shielding”?

A: Yes, the latest government guidance clearly states that you can furlough employees who are unable to work because they are shielding in line with public health guidance (or need to stay home with someone who is shielding).

NB There has been some confusion arising from the recent change to the SSP regime, which provides that if an individual is unable to work because they fall within the extremely vulnerable category and have been advised to shield, they are deemed to be incapable of work and are, therefore, eligible for SSP.

Some commentators have suggested that this change prevents an employer from furloughing someone who is shielding until the 12-week shielding period expires. However, we disagree. Our view is that, whilst the recent SSP change entitles a shielding employee to SSP if they are unable to work (which was previously not the case), an employer can still decide to furlough a shielding employee, in accordance with very clear government guidance.

Q: Can I furlough employees returning to work after being on sick pay and, if so, how do I calculate their furlough wages?

A: In line with other employees, claims for full or part-time employees furloughed on returning to work after time off sick should be calculated against their gross salary, not the pay they received whilst off sick.

Claims for returning employees on variable pay should be calculated using either the:

  • same month’s earnings from the previous year; or
  • average monthly earnings for the 2019 to 2020 tax year.


Q: Do employees accrue and can they take holiday while on furlough leave?

A: Yes. The latest guidance confirms that:

  • Employees accrue holiday, as per their employment contracts, during furlough.
  • Employers and employees can agree to vary holiday pay entitlement as part of the furlough agreement. However, they cannot go below the minimum of 5.6 weeks of statutory paid annual leave each year.
  • Employees can take holiday whilst on furlough. NB An employer must still consent to this and can restrict when leave is taken (both during furlough and the recovery period) if there is a business need.
  • If an employee usually works on bank holidays, their employer can agree that this is included in the grant payment. If an employee usually takes a bank holiday as leave, their employer can either top up their pay to their usual holiday pay or give them a day’s holiday in lieu.

Q: What should I pay for any holidays taken during furlough?

A: The latest CJRS Guidance for Employees confirms that holiday taken during furlough should be paid at an employee’s usual holiday pay rate, in accordance with the Working Time Regulations, namely:

  • at an employee’s normal rate of pay; or
  • where an employee’s rate of pay varies, calculated on the basis of the average pay the employee received in the previous 52 working weeks.

Employers are obliged to pay the additional amounts over the grant, namely to “top up” the 80%.

Q: Can I make employees take holiday during furlough, to prevent them banking this and using it all when we are back to normal and need them at work?

A: Under the Working Time Regulations, you can require workers to take holiday by giving them twice the period of notice as the period of holiday you want them to take. In theory, the same principle should apply during furlough leave, and the latest ACAS guidance suggests this is the case.

However, we would recommend caution in light of:

  • the absence of official government guidance on this point;
  • the government’s decision to allow employees to carry forward holiday (please see below); and
  • ACAS’s guidance on this carry forward, which suggests that people might be prevented from taking holiday due to being on furlough.

Q: Can employees cancel holiday they have already booked?

A: Yes, with your agreement. However, you can still require them to take holiday they have already booked.

Q: How much holiday can employees carry forward and for how long?

A: The government has recently announced that employees can carry forward (for two holiday years) up to four weeks’ holiday which they have been unable to take due to COVID-19.

This was intended to protect employees and ensure that those who could not take holiday due to the pandemic (e.g. key workers) did not lose the ability to do so.

However, ACAS guidance is clear that employers should still be encouraging workers and employees to take their paid holiday during the holiday year, if possible.


Q: Can I still make someone redundant, instead of placing them on furlough?

A: Tread very carefully and make sure that you consider (and document) whether furlough leave would be a reasonable alternative to redundancy in the circumstances.

Q: If I reinstate a redundant employee and place them on furlough, do I need to consult with them again if I decide to make them redundant at the end of the furlough?

A: Yes, especially if the employee has 2 years’ service. The redundancy is likely to be unfair if you do not re-consult, as the situation may have altered since the previous consultation process.

What should you be doing now?

Follow the above guidance and the latest updates from the government. If you have any queries, please feel free to call or email our employment team who will be able to advise on the matter.

The government guidance on the scheme can be found here.



These notes have been prepared for the purpose of an article only. They should not be regarded as a substitute for taking legal advice

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