In this update we are pleased to provide further information on the Coronavirus Job Retention Scheme (CJRS) following the Government issuing a Treasury Direction, which confers power to HMRC via the Coronavirus Act 2020. We are also taking the opportunity to highlight an employer’s obligation to collectively consult with appropriate employee representatives where large-scale redundancies (i.e. 20 or more) are proposed.

Points to note include:

HMRC portal

The first trial of the HMRC portal took place last week and we are told that it will be open for applications in the week commencing 20 April with the first reimbursements starting from 30 April. The aim is for payments to be made within 4 to 6 days after submissions being made.

Eligible employees

Claims under the CJRS will now be possible in respect of employees who were employed and on an employer’s payroll on or before 19 March 2020.

Employees who were notified to HMRC on a Real Time Information (RTI) submission (RTI is the PAYE notification to HMRC) on or before 28 February, but who were subsequently made redundant or stopped working for an employer after that date but before 19 March, can also be covered by the CJRS if they are reinstated and put on furlough. Special provisions apply.

Salary reference period

The reference date for salary to be reclaimed for salaried employees is now the last pay period before 19 March 2020, rather than 28 February. However, an employer can choose to calculate its first claim on the employee’s salary as of 28 February 2020 (where this differs from salary in the last pay period before 19 March 2020).


HMRC has confirmed that to be eligible for the grant, employers must confirm in writing to its employees that they have been furloughed. Furlough letters should be sufficient for this purpose and must be retained for at least 5 years; employees should also be asked to retain a copy for their records.

To be eligible for the grant, employees must not carry out work for employers

In terms of email communication with staff, we do not recommend that this is cut off as it is the quickest way to get hold of people if, for example, they need to be asked to return to work quickly if the skeleton staff get sick. We also think it is acceptable to ask staff to keep a check on emails and if there are any queries, to send them on to the people manning the office, but it must be clear that they are not to do any work. Some employers we know are conducting welfare meetings with furloughed employees and generally using emails to check in.

Sick leave

If employees are self-isolating or on sick leave, they’ll be able to get Statutory Sick Pay (“SSP”). You cannot claim the CJRS grant for employees while they’re getting SSP, but the Treasury Direction states that the furlough period will not come into effect until the SSP period has come to an end. There is, therefore, a question mark as to the position of an employee that is currently sick and receiving SSP and when they can be put on furlough leave.

If a furloughed employee who becomes sick is moved onto SSP, you can no longer claim the CJRS grant for that employee. You can, however, decide whether to keep them on furlough or treat them as sick and move them onto SSP. If the employee remains on furlough, you can continue to claim through the CJRS. If the employee is moved onto SSP, you will have to pay this and would not be able to claim under the CJRS.

Shielding employees

You can claim for furloughed employees who are shielding in line with public health guidance (or who need to stay at home with someone who is shielding).

Maternity pay

The guidance suggests that employees can be on maternity leave and furloughed at the same time. The difference between SMP and any enhanced maternity pay can be claimed under the scheme (subject to the cap). The same principle applies if your employees qualify for contractual adoption, paternity or shared parental pay. Please note that there are some complicated questions around parental leave provisions and further advice should be obtained.

Benefits in kind and salary sacrifice schemes

The reference salary should not include the cost of non-monetary benefits provided to employees, including taxable benefits in kind which are excluded. Similarly, benefits provided through salary sacrifice schemes (including pension contributions) that reduce an employee’s taxable pay should also not be included in the reference salary. Where the employer provides benefits to furloughed employees, this should be in addition to the wages that must be paid under the terms of the CJRS. Normally, an employee cannot switch freely out of a salary sacrifice scheme unless there is a life event. However, HMRC agrees that COVID-19 counts as a life event that could warrant changes to salary sacrifice arrangements, if the relevant employment contract is updated accordingly.


There continues to be a debate about the taking of holidays during the furlough period as the Government has yet to clarify its position. The current guidance published on 15 April 2020 is silent on this point.

The Government has published the amendment to the Working Time Regulations, which confirms that where in any leave year it is not reasonably practicable for a worker to take some or all of their accrued leave as a result of the effects of coronavirus (including on the worker, the employer or the wider economy or society), the worker is entitled to carry forward the untaken leave in the two leave years immediately following the leave year in respect of which it was due.

There is much debate as to what grounds would qualify as it not being reasonably practicable for employeees to take holiday during the furlough period. The original guidance made it clear that the above provision was aimed at protecting keyworkers and frontline staff, who are vital during this pandemic. Nevertheless, the change applies to all workers subject to the qualification set out above.

While we await Government guidance the practical reality is that many employers need employees to take some accrued holidays and bank holidays (which are for specific days’ leave in any case) during the furlough period. However, if contrary Government guidance is issued (i.e. confirming employees can’t take holiday during the furlough period because of the regulations on holiday and/or it is argued that holiday status breaks furlough leave), then employers may be in a position whereby holiday absence that has been taken during the furlough period has to be re-credited to the employees’ leave entitlement.

The other issue raised about taking holiday during the furlough period would be whether there might be a requirement for the rate of pay to be topped up to their full rate. However, on a practical level, it would seem reasonable to address this question once the position becomes clear through further guidance. Again, if it transpires that any holiday taken during this period has to be paid out at the 100% salary rate, then there can always be an adjustment in the future with a “truing up” to account for the shortfall.

Preparing for furlough to come to an end – staff consultation

The Government has confirmed that the current CJRS scheme will be extended for 1 month, until 30 June. The economic impact of COVID-19 is affecting businesses differently and accordingly, the steps being taken vary across businesses and sectors. However, in many cases, the stark backdrop to any furlough arrangements may well have been as an alternative to redundancies. It is also recognised that businesses that are currently in a holding position will be waiting to see what the impact is going to be on their businesses after the lockdown is lifted, and a review of their business needs going forward might well mean that some roles are going to be surplus to requirements.

While we appreciate that many employers are awaiting confirmation from the Government as to whether it intends to extend the CJRS or not before forming redundancy proposals. In our view it would be prudent for employers to at least start considering what steps or measures the business may need to take once the CJRS comes to an end. This is particularly important where large-scale redundancies (i.e. of 20 or more employees) are likely to be proposed. The reason for this is that as a matter of law, collective consultation is required with employee representatives for either 30 days where 20 but less than 100 redundancies are proposed or 45 days where 100 or more redundancies are proposed, within 90 days or less. The maximum sanction for breaching this obligation is a “protective award” of up to 90 days’ gross actual pay for each affected employee, potentially giving rise to substantial liability.

For large-scale redundancies to take effect on or around 30 June, the collective consultation process would ideally need around 17 May.

There is a defence to a failure to collectively consult where there are “special circumstances where it is not reasonably practicable” for an employer to meet fully the aforementioned consultation periods. The legislation does not define what would constitute a “special circumstances” defence but it is expected to cover the most extreme circumstances such that even an impending insolvency situation is not on its own sufficient. We are in unchartered territory with a global health pandemic but the unprecedented economic measures that the Government has announced are going to be relevant here and are such that it may make it even harder for employers to rely on the “special circumstances defence”. Accordingly, the recommendation has to be that employers need to plan for and factor in the need to collective consult as far as is practicable.

What should you consider?

  • We anticipate that notwithstanding the CJRS scheme in place, the economic impact on businesses is going to be subject to ongoing analysis of the viability of roles. Employers will need to ensure that they have at least taken the first preparatory step in the collective process so that they can proceed with a collective redundancy exercise if required.
  • Absent a recognised trade union or otherwise appointed employee forum, we recommend that employers should now look to elect employee representatives that sufficiently represent the affected workforce, thereby limiting an employer’s exposure to protective award claims arising from the need to make large-scale redundancies.
  • It should be noted that the legislation requires the election process to be fair and, in so far as is reasonably practicable, for the election process to be in secret. There are challenges here given that so many employees will be working from home but an effective way around this would be to use online survey companies like SurveyMonkey.
  • Weekly meetings should be convened between the senior management and elected representatives, who can then channel important messages and speedily gather thoughts from the wider workforce. Given the scale of the challenge posed by the COVID-19, having an employee communication tool like an employee representative group is likely to be a very powerful and constructive means of engaging with and supporting its workforce.

The above information is based on the guidance issued by the Government and the recent Treasury Direction but as additional guidance or legislation is published there may be further points that are clarified. We can help and support on all of the issues highlighted above. For further information about anything covered in this article, please contact Asha Kumar or Angharad Harris using the contact details below.

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This article is for general information purposes only and does not constitute legal or professional advice. It should not be used as a substitute for legal advice relating to your particular circumstances. Please note that the law may have changed since the date of this article.