CJRS & flexible furlough extended

Image to go alongside article explaining the Coronavirus Job Retention furlough scheme has been extended to end of March 2021

Article updated 4th January 2021
First published 31st October 2020

Please note that from December 1st 2020, employers cannot use the CJRS grant to fund the (statutory or contractual) notice pay for employees who are being made redundant. Nor can the CJRS be used to fund the statutory redundancy payments for employees with over 2 years service. However, this Treasury direction remains unclear on whether employers can claim for an employee working their contractual, or just statutory, notice during November 2020. We wait to hear.

CJRS furlough scheme Latest

  • On 17th December 2020 the Chancellor announced that the CJRS ‘furlough’ scheme would be extended once again, this time for a further month. It will now run until 30th April 2021.
  • The Job Support Scheme, which was scheduled to start on 1st November, as a type of replacement to the CJRS, has been postponed until after the CJRS ends.
  • The Job Retention Bonus has been cancelled.

Employers can start claiming for the extended CJRS from 8am on Wednesday 11th November.
HMRC Portal for claiming the grant at:


On 31 October 2020, following the announcement of England going into its second lockdown from 5th November, the Government confirmed that the CJRS / furlough scheme would be extended until 31 December 2020; on similar terms to the first lockdown CJRS scheme (i.e, with employees receiving 80% of their current salary for hours not worked, up to a maximum of £2,500). At the same time, the proposed Job Support Scheme, and the Job Retention Bonus were postponed. The Job Support Scheme is planned to start once CJRS ends. The Job Retention Bonus – for employers who have retained staff – will, the Government says, be replaced by an ‘appropriate incentive’ that it will announce in January 2021.
The CJRS scheme now runs until 30th April 2021.

Full guidance on the scheme is available on, Check if you can claim for your employees’ wages through the CJRS.

Extended CJRS furlough scheme, key points:

Here are the key things you need to know about the extended scheme:

  • Available to all employers
  • From 1st November 2020 until end April 2021
  • Employers must submit any claims for the current month no later than 14th day of the following month. You can claim before during or after you process payroll, so long as the claim is submitted by this deadline
  • Check the page above for payment timescales going forward. For example, claims for furlough days in December 2020 must be made by 14 January 2021.
  • Keep any records that support the amount of CJRS grant you claim in case HMRC needs to check them. You can see or download previously submitted claims by logging onto your CJRS service on
  • Staff can be on full furlough (doing no work for the employer) or flex furlough (part working, part on furlough)
  • In both situations the employer pays just the NI and Employer Pension Contributions, and
  • The Government gives a grant of 80% of wages, up to a cap of £2,500 per month 
  • Employees must be on the Employer’s PAYE payroll at 30th October which means a Real Time Information (RTI) submission must have been made to HMRC for that employee by 30th October
  • Claims can be for any period but check the HMRC guidance for the details
  • HMRC will publish the names, broadly the values of claims and company registration numbers of employers who make CJRS claims for periods from December onwards.
  • For claim periods from December, your employees will also be able to check if you have made a CJRS claim on their behalf through their online Personal Tax Account. To set up a Personal Tax Account go to and search ‘Personal Tax Account: sign in or set up’.

Template letter for full furlough leave from November 2020 onwards

Download the template

Government guidance for the extended CJRS Scheme remains. Employers should still notify the employee that he/she is on furlough and send a letter showing changes to the employment contract. Employers are advised to gain the employee’s agreement to the changes and evidence of the agreement, by asking the employee to return a counter-signed copy of the letter, or at least an email confirming they understand and agree with the changes, when an employee goes onto furlough leave.

You can download this template letter which contains the changes to the employment contract and employees agreement. There are notes in the letter to help you complete it.

Just a reminder here, under employment law if the employer wants to change the 100% salary and benefits for the days/hours that an employee is working, then this will need to be by agreement with the employee which is why obtaining proof of agreement is important. 

When employers are making decisions in relation to the process, including deciding who to offer furlough to, or to return from furlough, equality and discrimination laws will apply in the usual way. We recommend regular communication with staff and giving sufficient notice for the return from furlough.

Which workers are eligible?

  • Broadly, all employees and workers whether full time, part-time or on zero hours contracts are eligible – see below for more details.
  • The cut-off point for employees to qualify for CJRS is that they must be on the payroll at 30 October 2020.

Paying employee taxes and pension contributions

Employees will still pay the taxes they normally pay out of their wages.

Employers must deduct and pay to HMRC income tax and employee National Insurance contributions on the full amount that they pay the employee, including any scheme grant.

Employers must also pay to HMRC the employer National Insurance contributions on the full amount that they pay the employee, including any scheme grant.

Employers must report these payments via a Full Payment Submission to HMRC on or before the pay date.

Employees will also still pay pension contributions (both employer and automatic contributions from the employee), unless the employee has opted out or stopped saving into their pension.

What should employers do next?

Strategic considerations

Employers need to decide if they are going to access either the full furlough or the flexible furlough in each case for minimum periods of 7 days.

It’s vital you keep clear and accurate records of employees’ working hours and days. The HMRC portal requires clear statements from employers about days/hours worked back in the business and those unworked where the employee is on flexible furlough leave. This will ensure that the correct grant payment is claimed and reduce fraud. HMRC have the power to inspect these documents, to ensure valid grant claims are being made.

Now is the time to check employee and worker contracts again to see what changes are needed to be agreed with staff either in the short term for either full or flexible furlough.

Employers need to remember that consultation may be needed with the employee representatives (who need to be elected in advance) or trade union representatives if the employer’s proposals will lead to the risk of 20 or more people being dismissed (for redundancy). Please remember that changes proposed by the employer to more than 20 staff which, if unaccepted, would lead to dismissals (for redundancy), will still require this consultation exercise.  

If you are planning to make furloughed employees redundant whether they are on full-time furlough or flexible furlough, you need to be aware that the CJRS grant payment cannot be used to fund (1) the employee’s notice period payment (whether under the contract or the statutory accrual of 1 week for each year of service) and/or (2) the statutory redundancy payment (if the employee has worked 2 or more years).

Template letter for return from furlough leave

Download the template

We have put together this template return from furlough leave letter that, following discussions with furloughed employees, you should customise and send to them, confirming their return to work.

If the employee is returning on their pre furlough terms, there is no need to gain agreement. If you plan to ask a furloughed employee to return to work part-time however, then the part time arrangements, and any changes in their working hours and / or salary & benefits should be set out in the letter. The Government advises employers to gain the employee’s agreement to the new changes to their furlough leave arrangements and, keep a record of the communications for 5 years. We agree – otherwise there is the risk of employment grievances and claims and the wasted management time and costs defending an Employment Tribunal claims. Agreement must be sought where salary, benefits, working hours or place of work are changing. 

How do I make a claim for furloughed staff under CJRS?

By now all employers will have registered for the scheme and have arrangements set up with accountants and payroll agents who are authorised to make claims.

HMRC has produced updated guidance for employers on how to calculate your claims, it explains different pay and grant reclaim scenarios.

Guidance for employees can be found on GOV.UK check if your employer can use the CJRS scheme.

Which businesses are covered?

The scheme will be open to all UK employers, including charities, recruitment agencies, and public authorities (who are not receiving direct support from the government) so long as they have:

  1. created and started a PAYE payroll scheme on or before 30 October 2020, and
  2. have a UK bank account

Which employees are covered?

The HMRC guidance states that CJRS will cover employees who have been on the payroll since 30th October this year, on any type of contract including:  

  1. full-time and part-time employees
  2. employees on agency contracts, and
  3. employees on flexible for zero-hour contracts

An employee is considered furloughed under the scheme only if he or she does no work for the employer. Note furloughed employees are allowed to undertake training for their current employer, and this training has to be paid at their full salary rate.

In recent updates to the CJRS scheme, employees who are unable to work because they have caring responsibilities resulting from COVID-19 can also be furloughed.

How to put employees on furlough leave?

Employers need to:

  • Decide which employees to designate as furloughed workers.
  • Notify those employees of the intended change.
    The HMRC guidance states that it is important to take legal advice on this because the changes will affect each worker’s contract of employment and need the workers’ agreement.
  • Consider whether you need to consult with employee representatives or trade unions.
    For example, where the employer intends to vary the contracts of 20 or more employees, and it intends to dismiss employees who do not consent to the change in their terms, for the purposes of the Trade Union and Labour Relations (Consolidation) Act 1992 (TULRCA), those employees who do not consent to the change in their terms will be classed as dismissed by reason of redundancy.

    The employer will therefore have a duty to inform and consult appropriate employee representatives and notify the Secretary of State using form HR1.

    The HMRC guidance states that employers will need to follow this process before placing employees on furlough leave.

  • Agree the change with the furloughed employees.
    Most employment contracts will not permit an employer to reduce an employee’s pay, provide them with no work, and change their employment status without agreement – otherwise there is the risk of a constructive/unfair dismissal, wrongful dismissal/breach of contract claims and unlawful deductions of wages claims.

    Technically under the employment contracts each employee should be given the period of notice in their employment contract (e.g. one month for most employees or the number of weeks equivalent to the years of service if longer) before the change takes effect, or agreement reached with the employee.

    However, faced with the alternatives, which are likely to be unpaid leave, lay-off, or redundancy, the majority of affected employees are likely to agree to be placed on furlough leave.

  • Confirm the employees’ new status in writing. Ideally, the employer should advise how long it expects furlough leave to continue, however this may be difficult in the current climate. Employers may wish to put employees on furlough leave for an initial period, subject to review.
  • Submit information to HMRC about the employees that have been furloughed and their earnings through the new online portal, (see above).
  •  Ensure that the employees do not carry out any further work for the employer (except training). The employee can still volunteer as e.g an NHS or care volunteer.

What wages should employers pay during the period of furlough leave?

  • Employers can check exactly the wages that they can recover through the scheme on the HMRC guidance, and can check out worked examples in the links.
  • During the period of furlough leave, the employer should pay the employee at least the lower of 80% of the employee’s salary or £2,500. In each case PAYE (Income Tax) and NI is deducted before the salary is paid to the employee.
  • The HMRC guidance states that employers can choose to top up wages to 100%, but are not obliged to do so.
  • For full-time and part-time salaried employees, the employee’s actual salary, before tax, as at 30 October, should be used to calculate the 80%. 
  • The employee’s wage will be subject to income tax and other deductions e.g NI and workplace pension contributions.
  • The HMRC guidance notes that fees, discretionary commission and bonuses should not be included. 
  • Where an employee’s pay varies, the employer will be able to claim for either:
    -the higher of the employee’s earnings in the same month the previous year, or
    -the employee’s average monthly earnings in the 2019/20 tax year. 
  • In the case of an employee who has been employed for less than a year, the employer will be able to claim for an average of the employee’s monthly earnings since he or she started work. 
  • The Guidance also covers the application of the national minimum wage (NMW) to furloughed employees.  It states that, since employees are only entitled to the NMW while doing work, furloughed employees, who are not working, must be paid at the 80% rate (or £2,500) even if, based on their usual working hours, this would be below the applicable rate of NMW. 
  • However, the Guidance goes on to state that if employees are required to, for example, complete online training courses while they are furloughed, then they must be paid at least the NMW for the time spent training, even if this is more than the 80% of their wage that will be subsidised.
  • The National Minimum wage from April 2020 is £8.72 for those aged 25 and over.

What happens if an employee’s health has been affected by Covid-19?

Employees who are on sick leave should receive statutory sick pay but can be furloughed during this time. We therefore think that an employee on contractual sick pay could also be placed on furlough leave. However we think employees receiving any other statutory payment, such as statutory maternity pay, paternity pay, adoption pay cannot be also placed on furlough.

An employee who is currently on furlough leave may move to be on another statutory leave, e.g Maternity leave.

Employees who are self isolating in line with Public Health Guidance or at home looking after children can be placed in the Coronavirus Job Retention Scheme.

What should I say to employees and what should I ask them to sign?

It is still best to adopt the best HR and employment law practice of explaining to a worker the changes and writing to them to confirm they are on furlough leave / any new flexible furlough arrangements and asking them to countersign the new agreement. Please contact us if you need help with any of your furlough agreements.

If the you are planning to reduce the salary and any benefits related to salary (eg pension) to the 80% level, then under employment law this is an unlawful deduction from wages for the 20% of salary and benefits, and could be constructive (unfair dismissal). This is why it is important to get the workers agreement.

It is important to maintain good communication with employees and be available to speak as needed. 

You should expect ongoing questions from your teams about this and returning from furlough leave after the second lockdown is lifted, we advise using these to produce your own Q&A to help them. Please contact us if you need a return from furlough leave letter.

Are employers obliged to top up the remaining 20%?

No, but employers can choose to do so.

What happens to pension, holiday and other benefits?

Each employer will have different arrangements, so explain the changes clearly to your staff. Employers will have to pay NICs and the workplace pension contribution. When paying their staff, employers will deduct the worker’s workplace pension contribution and pay the contributions into the relevant pension scheme as normal.

Employees will continue to accrue the basic 20 days and 8 public holidays (5.6 weeks) Working Time Regulations statutory holiday over the furlough leave period and any additional contractual holiday, and employers will need to pay this at 100% salary (because it is a benefit accrued when the employee was receiving full salary, calculated over the last 52 weeks average pay) even if employers are only planning to pay 80% salary.

Can a furloughed employee request to remain on furlough leave or switch to flexible furlough leave?

Yes, an employee can request, but it’s the employer’s decision. Discussion with the employee themselves to find what suits them and the business will of course smooth the path.

Potentially redundant employees do not have a right to require their employer to place them on furlough leave as an alternative to redundancy. However, it is hoped that many employers will continue to use the scheme instead of making redundancies and / or closing the business.

How do I choose which employees to put on furlough and which remain working?

Employers will make a commercial judgment about which critical business functions will need to carry on (e.g. Board or senior management oversight, IT support teams, finance teams, HR, legal, facilities management/security etc). Choosing who needs to be placed on furlough leave, to return on flexible furlough leave, or to return to work full time, may prove a challenging task for some employers. 

This is especially difficult if you intend to pay staff on furlough leave their full pay, while other staff are being asked to work as normal for their pay. Staff who were delivering services on-site, are likely to be natural candidates for furlough leave.

The starting point is to consider business needs as stated above. Keep records of why that decision was made showing which roles were critical to the business functioning.  As the minimum period of furlough leave can now be as short as one week, there is more flexibility for employers to bring back staff from / place staff on furlough leave as necessary, depending on the demand in the business.

You can also keep staff on flexible furlough leave where they work part-time some days in the business.

The HMRC guidance states that equality and discrimination laws continue to apply to the selection process for employees to go on furlough leave. Take care to avoid direct or indirect discrimination in the selection process. Make contact if you need help or have queries on this.

Where an employer must select between staff doing identical business critical roles, the first step is to ask for volunteers to remain working, or use a random selection policy for large teams. 

Where possible, employers who have employees who are no longer needed to deliver a service on site (e.g restaurants, leisure facilities, bars) as the site is shut, have asked for volunteers to be placed into the Coronavirus Job Retention Scheme and when return to work is possible. They have received very positive response and large numbers of workers accepting the re-designation in order to preserve their employment. It is vital to find out an employee’s and family situation, e.g caring responsiblities, so you know if the employee can return or not and if so whether working from home or onsite is more appropriate.

For the functions which are critical for the business (referred to above) employers could consider having enough staff available if a team member should go sick or have access to temporary worker support from home where possible so that critical functions can continue as the business re-opens in a Covid-19 secure way.

What happens if the employer has furloughed 20 or more staff and is changing terms and conditions?

This template letter has been written for situations where less than 20 staff are being called back from furlough leave. (If you recalling more than 20 staff from furlough, and you are planning to change their terms of employment on return, then collective consultation may be required. Please get in touch in this case.

If there are more than 20 staff and the employer would have to consider redundancies if the employees do not accept the new contract changes on return from furlough leave e.g a reduction to 80% or less salary, then a collective consultation process will need to be undertaken.

The Guidance makes specific reference to these risks and the need to take overall legal advice.

What is the minimum time that an employee can be furloughed?

Furlough leave runs for a minimum of 7 days. Employees can cycle on and off the scheme while it lasts. This allows employers flexibility, so they can bring workers back from furlough leave and if necessary put them back onto flexible furlough leave.

Can an employee volunteer or do training work during furlough leave?

A furloughed employee can volunteer as long as he/she does not provide services or generate revenue for the organisation.

If an employee is required to complete online training courses whilst they are on furlough leave then they must be paid their 100% salary (which must be of course at least National Living Wage/National Minimum Wage) for the day/s spent training.

What happens to an employee who is on maternity leave, contractual adoption pay, maternity pay or shared parental pay?

The normal rules apply and they are entitled to claim the usual statutory pay or allowances.

For example an employee who qualifies for statutory maternity pay will still be eligible for 90% of their average weekly earnings in the first six weeks, followed by 33 weeks of pay paid at 90% of their average weekly earnings or the statutory flat rate (whichever is lower). The statutory flat rate is £151.20 a week from April 2020.

If the employer offers enhanced (earnings -related) contractual pay to women on maternity leave this is included as wage costs and can be claimed through CJRS.

The same principle applies to contractual adoption, paternity or shared parental pay or parental bereavement pay.

Can I still make employees redundant whilst they are on furlough or afterwards?

Yes, and your employees have their normal rights to redundancy protection and payments in this situation. The Government has confirmed that payments should be at the 100% salary level for statutory redundancy and the statutory notice period if that notice period applies instead of the notice period and salary in the employment agreement (as varied by any agreed flexible furlough arrangement).

Can I change an employee to be back to work after they have completed the minimum 7 days furlough leave?

Yes, employers can place employees on furlough leave more than once, and one period can follow straight after an existing furlough period. The scheme is open until the second national lockdown ends.

What happens when CJRS ends?

Employees that have been on furlough leave have the same rights as they did previously. Returning employees will still have their usual rights to statutory sick pay, maternity rights, other parental rights and rights against unfair dismissal and suffering discrimination. Please contact us if you need a return from furlough leave letter.

What happens if the business can no longer receive back all employees when their furlough leave ends?

Employers will need to make a decision, depending on the business situation at that time, whether all employees can return to their duties.

If the business is not in a situation to receive employees back when their period of furlough leave ends, it will be necessary to consider termination of employment through a fair and reasonable redundancy process.

Please contact us by email or phone, number below, if you need advice or you want to discuss what to do next. We are here to help.

The information set out in this article is correct at date of publication (5 November 2020). The effect of coronavirus on businesses means things change fast, and so it is important to obtain legal advice to ensure you are properly protected.


For more information or queries about issues discussed in this article, please contact by email.

To speak directly with Richard or any other of The Legal Partners team of specialist business and HR lawyers based at our Richmond UK office, or our partner lawyers in Singapore or Guanzhou, please call +44 203 755 5288

This article explains the main legal issues and common situations to consider. It is not a substitute for legal advice. Please get in contact to discuss your particular issue or queries.