Introduction

We expect that you will be inundated with guides on the CJRS. Each will be similar in many ways but you may find there is some differing of opinion. That is because the right of “furlough” is new to the UK. It never previously existed here. The term furlough already exists in other jurisdictions (e.g. the US) but that right is different to the new right in the UK and so we cannot take any learning from other countries.

Furthermore, the guidance issued by the government on 26 March 2020 (namely: Link to guidance for employers (Click here) and Link to guidance for employees (Click here)) is sparse and lacking in worked examples.

For those reasons, employment lawyers like us are having to interpret the new rules for ourselves and apply a “common sense” approach.

In addition, the new rules have been brought in with such speed (and are intended to be temporary in nature to deal with the crisis before us) that little, or no thought, has been given to how they fit in with already existing UK employment laws. Moreover, these may be new rules but we don’t see it as new law- no new regulations have been produced, for example- and so it is, essentially, just a new payment scheme between HMRC and employers. This may explain why the application of it is clunky and does not play out perfectly. Like you, we also have several questions (the “known unknowns”) and we have included some of those in this note.

It is not easy to apply new rules (at such speed) and so we hope that this note will help you to understand what has been introduced and how to apply it in practice. Please do get in contact with us if you need any assistance in applying the law to your specific situation.

Key aspects of the CJRS

It is a temporary scheme set to run for at least 3 months from 1 March 2020 to 30 May 2020 (but may be extended).

The key aim is to allow businesses to keep hold of their staff and talent pool during the crisis and avert mass redundancies. The thinking is that, without the scheme, employers could not afford to do this (given the down turn in work and consequent lost revenues) and so this is why the government has stepped in to help. In time, if and when the work picks up again, the idea is that businesses can then call upon those they have furloughed and won’t need to commence fresh recruitment processes. If the work does not pick up again (or to the levels that it once was) then we expect there will be a need for redundancies at that point. Hopefully, that will not be the case of course.

The CJRS is open to all UK employers who had a PAYE payroll scheme running on 28 February 2020 and whose operations have been severely affected by coronavirus.

Employers will have access to a portal so that they can claim 80% of furloughed employees’ monthly wage costs, up to a maximum of £2,500 per month plus employer’s NICs and employer’s pension contributions. See further detail below.

The CJRS is expected to be up and running by the end of April.

Frequently Asked Questions