Home Knowledge base Employment law Human resources Selecting employees for furlough – Q & A Sessions by CIPD


Q: What if employees have some work but not enough?

If employees have some work but not enough then they cannot be furloughed under the job retention scheme. Employees are not allowed to carry out work for the employer during the furlough period. The scheme is only aimed at supporting employers who otherwise could not maintain their workforce because the business has been affected by coronavirus.

If employers’ priority is to obtain the payments under the scheme, then reducing everyone’s hours equally will not work. Employers can arrange staffing needs differently, for example:

  • Keeping some (perhaps essential) people working full-time on normal pay and others not working on furlough pay.
  • Alternatively, employers can rotate the furlough by having some employees on furlough and others fully working. Then after at least three weeks those fully working can be on furlough and the others start working again.

Employers should consult staff to find a solution that works for everyone. If employers decide a reduction in hours or pay is the only solution, then employees will need to agree and this will fall outside the coronavirus job retention scheme payments.

Q: What if the employee has a second job?

If a furloughed employee works elsewhere there are two main possibilities.

Employees who continue an existing second part-time job: Employees with two or more jobs are eligible for the scheme. The government has confirmed that each job should be treated separately. So, if an employee has more than one employer, they can be furloughed from one job, or both jobs. The £2,500 cap will apply to each employment individually. If the employee only works elsewhere outside the hours of the job they have been furloughed from, then no problems would arise.

Employees who take on elsewhere during their normal contractual hours: The amended government guidance has now confirmed that employees can be furloughed in one job and receive their 80% furlough payment and can start working for another employer during the hours they would normally be working for the employer who has furloughed them. They will receive the furlough payments from the first employer and their normal wages from the new employer.

Whilst working elsewhere is permissible under the coronavirus job retention scheme; whether the employer agrees to this is a separate matter. The employer and employee’s agreement depend upon a number of issues, including the competitive nature of the business and the terms of the original contract.

During furlough an employment relationship continues so there is a potential legal argument the employee should not be working elsewhere during those contracted hours. In many employment contracts there is either an express or implied term that the employee should loyally and faithfully work for the original employer and not work elsewhere. It could technically be breach of contract with that employer to work elsewhere. Ultimately what happens will be a question of negotiation between the original employer and employee, which are likely to require changes to the contract of employment.

Employees have to consent in writing that they will cease all work. Employees should also consent to being furloughed and the pay reduction (unless there are lay off provisions in their contract). Employees could say they only agree to being furloughed and taking a 20% (or more) pay cut if the employer agrees to them working elsewhere during their normal working hours. Employers will have to think carefully about how best to proceed; employers could ask employees to agree new or reconfirmed restrictions on working elsewhere, especially if for a competitor. The safest course of action is to agree with the employee the nature and length of any other work that may be done, ideally in writing. The employer may agree to furloughed employees working in, for example, the food, health and social care sectors or other essential services during the pandemic. Another option would be to refuse any requests for employees to work elsewhere but top up the salary to 100% during the furlough period.

If employers refuse any requests to work elsewhere and only allow furlough on 80% pay or move to redundancy, then there is a risk of breach of contract claims or that the selection criteria may come under scrutiny especially if there are other employees still working on 100% pay.

Legal advice should be taken for changes to terms and conditions and you should stay up to date with the latest government advice.

Q: If employees do not agree to be furloughed can we dismiss by reason of redundancy?

Yes, if employees do not agree to be furloughed employers can dismiss by reason of redundancy if the redundancy definitions are met and a proper process followed.

Government guidance now states that employees must give written consent to cease all work. Ideally employees should also content to being furloughed and the pay reduction (unless there are lay off provisions in their contract).

Some employers may feel that the long-term effect on their business will be inevitable closure or rationalisation. It may help employers to select employees for furlough using a process similar to redundancy selection. This would involve using objective criteria, such as a scores matrix based on skills, productivity, previous appraisals etc. Most employees realise that furlough is a way of avoiding redundancies and are therefore likely to agree.

Q: Can we place employees who are shielding on furlough even if there is work for them to do?

Yes, employers can place employees who are shielding in line with public health guidance on furlough even if there is work for them to do. Employees who need to stay at home with someone else who is shielding are also covered. Shielding employees are those who are extremely vulnerable (for example, due to organ transplants,  lung cancer, severe chest conditions or immunosuppressed conditions) and who have been notified by the NHS to isolate for 12 weeks. If shielding employees can work at home, then they can continue to do this unless they become unwell. However, if there is no work to do at home, the shielding employees can be furloughed.

The subsequent government advice supplementing the coronavirus job retention scheme has confirmed that the employers can claim the furlough grant for those shielding employees; they do not have to be placed on sick pay.

Q: We just made a group of employees redundant; should we reinstate them and put them on furlough leave?

Employers who have just made a group of employees redundant can reinstate those employees and put them on furlough leave.

The government has confirmed the coronavirus retention scheme covers employees who have already been made redundant after 28 February 2020, if they are rehired by the same employer. It is not mandatory for employers to reinstate employees and then place them on furlough, but for redundancies that are still in the pipeline, there is a risk of unfair dismissal claims if the furlough option is not considered along with all the usual method of avoiding redundancies.

Reinstatement under the scheme remains possible despite the change in the relevant payroll date. To be eligible for furlough payments, employees must generally be on the PAYE payroll on 19 March 2020:

  • Employees who were made redundant before the original payroll date of 28 February 2020 are not eligible under the scheme at all. This is because those employees were not on the PAYE payroll as notified by the real time information submission to HMRC on 28 February 2020.
  • Any employees who were on the payroll on 28 February 2020 but were then promptly made redundant before 19 March, can be rehired and then furloughed if employers choose to do so. The rehire and furlough can still be implemented, even if the employer only decides to do this after 19 March.
Employers do not have to rehire but should remember that as part of the redundancy process they have to explore alternatives. The aim of the furlough scheme is to help employers maintain their current workforce because their operations are severely affected by coronavirus, employees could at least argue that any redundancy decisions made during the three month operation period of the furlough scheme, would be unfair if furlough was not properly considered.

Employers who decide they have no alternative but to press ahead with redundancies now, despite the existence of the scheme, should fully consult and keep careful records to show why the redundancies will still be needed despite the scheme’s availability.

The ability to reinstate and furlough under the scheme also appears to include employees whose employment terminated for reasons other than redundancy. Furlough claims can be backdated to 1 March 2020 provided the employees had stopped working for the period of claim.

When the government ends the job retention scheme at the end of June (unless extended) employers can decide whether there is sufficient work for employees to return. If the work has ceased or diminished, or is expected to cease or diminish, then redundancies can be implemented at that stage following full redundancy procedures for notice, consultation and selection.

Q: What if employees are already dismissed; can they be reinstated to get the furlough salary?

Yes, some employees who are already dismissed can be reinstated to get the furlough salary. To be eligible employees must generally be on the payroll on 19 March 2020 but special rules apply to dismissals after 28 February.

Employees made redundant before 28 February: These employees will not be eligible to claim under the scheme. Before this date employees are unlikely to have been dismissed due to the virus anyway. If staff were made redundant or laid off before that date (or at any time) for a reason unrelated to the coronavirus outbreak, they are not eligible claim under the scheme even if they are reinstated.

Employees made redundant or dismissed since 28 February 2020: Employees who have been made redundant or dismissed since 28 February can be reinstated and placed on furlough. If the employees were not redundant but were on unpaid lay-off they should still be on the payroll and can simply be changed to being a furloughed worker.

Redundancy payments, payments in lieu of notice, holiday pay on termination and severance payments may need to be reversed by agreement. Perhaps these can be offset against future salary payments and deducted from their salary for subsequent months if this is agreed as part of the reinstatement. If holiday pay received on termination is repaid, then holiday entitlement would need to be reinstated.

Q: What is the position of employees who already ceased employment with the employer before 19 March 2020?

The position varies for employees who ceased employment before 19 March 2020 depending on the reason for their departure. The position is as follows:

  • Employees who left the employer before 28 February are not eligible for the furlough scheme.
  • Employees who stopped working for the employer for a reason not due to coronavirus before or after 19 March 2020 (for example because they left voluntarily to start another job) are not eligible unless they fall into the category below.
  • Employees who were made redundant, furloughed, laid off or who stopped working due to coronavirus between 28 February and 19 March 2020 could still be eligible for the scheme. These employees can still be put on furlough and claimed for. However, this may involve re-employing them if they had been fully dismissed by reason of redundancy before the 19 March. For further details please see the FAQ on whether former employees should re-employ and furlough previous employees (below).

Q: Can employers place new employees on furlough immediately and receive an 80% contribution towards their pay?

No, if an employee starts a new job the employer cannot immediately then furlough that new employee and claim reimbursement of 80% of their pay under the coronavirus job retention scheme.

The scheme is only open to all UK employers that had created and started a PAYE payroll scheme on or before 19 March 2020. The relevant employees must have been on the payroll on that date (because the government changed the original payroll date from the 28 February 2020 employees who were on the payroll then but were made redundant or stopped working for the employer between then and 19 March still qualify for the scheme. The employer may need to re-employ them to put them on furlough in some cases).

The situation covering new employees is relatively unusual but some employers may have a recruitment process already underway and have made job offers which have just been accepted. The following applies:

  • Employees hired after 19 March 2020 cannot be furloughed or claimed for under the scheme.*
  • Employees on unpaid leave before 28 February cannot be furloughed, until the date on which it was agreed they would return from unpaid leave.
  • Employees placed on unpaid leave after 28 February 2020 can be furloughed.
  • Employees already made redundant or laid off between 28 February and 19 March (when the scheme was announced) are eligible under the scheme if reinstated.
  • Employees on schedule to be made redundant after 20 March 2020 can be furloughed instead of proceeding with the redundancy process.

*The employer must have made a real time information (RTI) submission to HMRC in respect of the employee on or before 19 March 2020.If new employees were not on this employer’s payroll on that date they do not qualify for the scheme with their new employer unless they transferred under either the TUPE or PAYE business succession rules.

Q: Should former employers re-employ  previous employees so they can claim furlough pay for them?

Former employers can re-employ some previous employees so they can claim furlough pay for them but they are not required to do so. The basic rule is that to be eligible for a furlough pay claim employees must have been on the payroll and notified to HMRC on its Real Time Information system on or before 19 March 2020. Employees hired after 19 March 2020 cannot be claimed for, unless they were on the payroll on 28 February in which case special guidance applies.

Employees who were on the payroll on 28 February but not on 19 March

Because the government changed the 19 March payroll date from the earlier date of 28 February, employers with employees on the payroll and notified to HMRC on or before 28 February can claim furlough for those employees, even if they were made redundant or stopped working for the employer between the two dates. The employer can rehire the employees and put them on the scheme, even if they were not rehired until after 19 March.

This appears to include employees who were on the payroll on 28 February 2020 who resigned voluntarily. These employees could still be eligible for furlough if the former employer agrees to reinstating them. It appears that employees who left after that date to start a new job which then fell through due to the coronavirus could be furloughed if the previous employer agrees to re-hire them.

Employers are not obliged to reinstate employees. If staff are re-hired in order to furlough them the employees may revive their continuity of employment and have increased rights, there may also be a risk of discrimination claims if some are rehired and not others.

Employees who were not on the payroll on either 28 February or 19 March 2020

Some employees will fall through the net, as they were not on the payroll on 28 February or 19 March 2020 and not notified to HMRC on its system on or before 19 March 2020.In these cases alternative claims including Universal Credit may be available.

One option may be for an employee to persuade their old employer to try and reinstate them but the employer may be unable to establish they were on the payroll at the relevant date. If an employer agrees to reinstate and attempt furloughing a former employee who left before 28 February this may not permissible within the rules. There may be employees who were dismissed as redundant as well as those who left voluntarily.

The government guidance states that if an employee has had multiple employers over the past year and has only worked for one of them at any one time, and is being furloughed by their current employer, any former employers should not re-employ them and put them on furlough.

Although the furlough scheme covers the cost of wages backdated to 1 March this is to ensure that those people who already been made redundant or stopped working as a result of the coronavirus are covered, it is not intended to facilitate claims for employees who were not on the payroll at the relevant time for other reasons.

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