Furlough, Job Retention Scheme (JRS) and redundancy

In some cases, where work has ceased or been reduced because of the coronavirus restrictions, your employer might ask if you want to be furloughed. Information on what that means for you can be found below.

The Job Retention Scheme, also known as furlough, came to an end on 30 September 2021. If you have concerns about how your pay or annual leave were calculated while you were furloughed, contact your branch.

What if my employer is considering layoffs or redundancies?

As a result of the coronavirus crisis, many workplaces were closed and employees asked to work from home if they could. However, some jobs cannot be done from home and some employers have therefore considered lay-offs and redundancies. The UK government announced details of the Coronavirus Job Retention Scheme that has now been extended until the end of September 2021.

Employers can use this scheme to retain their staff until they can reopen for business, rather than make staff redundant. They can ‘furlough’ employees and apply for a grant that covers part of their monthly wage costs. Since 1 July 2020, employers can require employees to return part-time but must pay normal wages for days worked.

What is a furloughed/ flexible furloughed worker?

To access the Job Retention Scheme, employers need to designate affected employees as ‘furloughed workers,’ and notify their employees of this change.

Furloughed workers are unable to work because workplace operations have been affected by coronavirus.

If you are furloughed, this will change the status of your employment relationship – your contract. This change in employment status remains subject to existing employment law and, depending on your employment contract, may be subject to negotiation. This change should be temporary.

Can I work while on furlough?

Employers can furlough employees full-time or flexibly and ask you to work part-time for any amount of time and any shift pattern.

You cannot undertake work for your employer during time which you are recorded as being on furlough.

What pay can I earn as a Flexible Furloughed worker?

  • Since 1 July 2020, employers can require employees to return part-time as a Flexible Furlough worker but must pay normal wages for days worked. The employer can continue to claim for 80% wages on days not worked up to the cap of £2,500 per month.
  • From 1 August 2020, employers were required to pay employer NICs and pension contributions on furlough pay.
  • From 1 September 2020, employers were required to pay 10% of furlough pay and can apply to recover the remainder up to £2,187.50 per month.
  • From 1 October 2020, employers were required to pay 20% of furlough pay and can apply to recover the remainder up to £1,875 per month.
  • From 1 November, employers were no longer required to contribute to furlough pay, other than employer NICs and pension contributions, and could claim for 80% wages on days not worked up to the cap of £2,500 per month.
  • From 1 July 2021, the level of grant to employers will be reduced.  Once again employers will need to contribute towards furlough pay (10%, increasing to 20% from 1 August). However employees will continue to receive 80% of their wages, up to a cap of £2,500 per month for the time they spend on furlough.

Who decides whether someone is furloughed / flexible furloughed?

An employer decides who is to be furloughed / flexible furloughed. In choosing staff to be furloughed / flexible furloughed, employers will have to consider discrimination laws and the implied duty of ‘mutual trust and confidence’. Employers are likely to seek volunteers.

As this will require a variation of an employee’s contract, an employee’s consent is required before they go on furlough / flexible furlough and what has been agreed must be in writing.

Who can be furloughed/ flexible furloughed?

For periods ending on or before 30 April 2021, employees and workers can be furloughed/ flexible furloughed on the scheme if they were on PAYE at 30 October 2020.

Under the extended scheme for periods from 1 May‌‌‌ ‌2021 onwards, employers can furlough staff who were employed on 2‌‌‌ ‌March 2021 and who are any of the following:

  • full-time employees,
  • part-time employees,
  • employees on agency contracts
  • employees on flexible or zero-hour contracts
  • employees who were made redundant since 23 September 2020, if they are rehired by their employer.

What if I have caring responsibilities?

Employees who are unable to work because they have caring responsibilities resulting from coronavirus can be furloughed / flexible furloughed, such as employees who need to look after their children.

However employers must consider and avoid potential unlawful discrimination under the Equality Act 2010 (EqA 2010), such as indirect sex discrimination for mothers with sole parental responsibility for school-age children or associative direct disability discrimination for those who live with someone disabled.

What if I am shielding for health reasons?

The UK government has paused the shielding advice for those people identified as the ‘clinically extremely vulnerable.’  The Welsh government has also paused shielding.

In Scotland, if you are on the shielding list, the advice is that you should not go to work if you live or work in a Level 4 area, unless you can work from home. This applies even if you have had a coronavirus vaccine.

In Northern Ireland, a graduated easing of the advice for clinically extremely vulnerable people is planned, to commence on 12 April 2021.

UNISON’s position is that employers should continue to allow workers who had been previously shielding to stay at home on special leave on full pay until at least 21 June, if working from home is not possible.

If an employee cannot work from home, they may be eligible for furlough pay.

Speak to your UNISON branch if you think your employer is not treating you fairly.

What pay will I receive?

Full-time or part-time employees will be paid 80% of their actual salary, up to a maximum of £2,500 per month.  As before, it is unlikely that the wages covered will include fees, commission and bonuses.

As from 1 August 2020, employers have been required to pay employer NICs and pension contributions on furlough pay.

What if my pay varies month to month?

For employees whose pay varies, and they have been employed for 12 months before the claim, an employer should pay the employee 80% of either the same month’s earning from the previous year (or the same month’s earning in 2019 for claim months from March 2021) or the average monthly earnings from the 2019-20 tax year, whichever is higher.

For employees whose pay varies but they have been employed for less than a year, the calculation should cover the average monthly earnings since they started work, either between 6 April 2020 (or, if later, the date the employment started) and and the day before they were first furloughed on or after 1 November 2020 or on or after 1 May 2021.

Can my employer pay me below the National Minimum Wage if I am ‘furloughed/ flexible furloughed’?

The government has stated employees on the National Minimum Wage (NMW) can be paid less than this usual legal minimum. They say that the NMW does not apply to furloughed/flexible furloughed employees. However, if employees are required to engage in training activity, such as completion of an online training courses, whilst they are furloughed/ flexible furloughed, they must be paid at least the NMW for the time spent training.

Will my furlough/flexible furlough wages be subject to income tax and deductions?

Yes.

Will my employer still make National Insurance and minimum automatic enrolment pension contributions?

Employers remain liable for associated Employer National Insurance contributions and minimum automatic enrolment employer pension contributions on behalf of furloughed employees.  From 1 August 2020, employers could no longer claim for these costs from the government.

Can I request annual leave when on furlough/flexible furlough?

The government produced guidance about holiday entitlement and payments on 13 May 2020.  It is expected that this will continue to apply during the extended Job Retention Scheme.

There are some points which remain open for interpretation about how existing legal rights are affected. If you read the guidance and still have a query then please discuss with your UNISON branch who will be able to advise you.

What if I have more than one job?

Employees with more than one job can be furloughed/flexible furloughed for each job. Each job is separate, and the cap applies to each employer individually.

Can I do volunteer work/training if I am furloughed/ flexible furloughed?

Yes, so long as the volunteer work/training does not provide services to or generate revenue for your employer.

If you complete online training courses while you are furloughed, you must be paid at least the full National Living Wage (NLW)/National Minimum Wage (NMW) for the time spent training, even if this is more than the 80% of your wage that will be subsidised.

Will a company in administration be able to access the JRS?

Yes.

Further details on government guidance on this issue can be found here 

If you have been notified by your employer but are unclear then you should contact your UNISON Branch for advice.

UNISON has COVID-19 legal briefings on furlough, annual leave, sickness and redundancies and details of impacts of returning to work.

> Back to the general coronavirus information page