Update - Covid-19 Job Retention Scheme


Amanda Jefferies, Head of Employment Law, summarises the latest guidance which was published by the Government over the weekend about the Coronavirus Job Retention Scheme (Furlough Leave).

Up until now, there has been an element of guess work about how the scheme would actually operate in practice and whilst some questions remain unanswered, the latest official guidance is helpful and confirms the following:

  • Employees can start a new job when on furlough leave (lucky ones might therefore end up earning 80% of the old salary and 100% of a new one).  This was not prohibited in the earlier guidance, but the new guidance expressly allows it.  The guidance does say it has to be allowed under the old employment contract, but presumably the old employer can waive that.


  • An employer can reclaim 80% of compulsory (presumably meaning contractual) commission back from HMRC, as well as basic salary.  This must be referring to the commission from past sales as the furloughed employees cannot be completing new sales when on furlough leave.


  • Employees can be furloughed multiple times i.e. they can be furloughed, brought back to work, then re-furloughed (subject to each furlough period being at least three weeks)


  • Employers must notify employees of their furlough status in writing (the previous guidance did not require it be in writing) and keep a record of that written notification for five years.


  • Employers can reclaim 80% of fees (presumably directors’ fees) from HMRC.  The previous guidance said they could not.


  •  The 80% does not include non-monetary benefits (e.g. the value of health insurance or a car).


  • Company directors can be furloughed. They can still perform their statutory duties, but no other work for the company.


This entry was posted on April 7, 2020