The Coronavirus Job Retention Scheme - Further Update



The government last published updated guidance on the Coronavirus Job Retention Scheme (“the Scheme”) on 4 April.

The House of Commons Library, which issues briefing notes for MPs, issued FAQs on the Scheme on 8 April. It does not say anything new, but it provides a useful summary of the Scheme. For our updated observations on all of the main aspects of the Scheme, taking into account the contents of this blog, and links to the government’s current published guidance, click here.

The latest government guidance still provided no details as to how employers will claim payment under the Scheme, other than that HMRC is to set up a portal by the end of April, and it still said nothing on the key issues of how holiday and furlough inter-relate or the application of the Scheme in a TUPE situation.

However, although we await confirmation via further updated government guidance, there is more to report on these points.


Given that we are about to go into the Easter weekend, I comment first on the question of whether an employee can be on holiday whilst furloughed under the Scheme without “breaking” the period of furlough.

If the answer to that question is “no”, then as a period of furlough must last for at least 3 weeks in order for it to qualify for the Scheme, if Good Friday and/or Easter Monday, or any other days within 3 weeks of an employee having commenced furlough, are treated as holiday, a relevant employer will not be able to claim payments under the Scheme for the period preceding the holiday.

Although guidance published by Acas originally stated that it was “not practical” for employees to take holiday whilst on furlough, its guidance has now been amended to read:

If an employee or worker is temporarily sent home because there’s no work and the employer intends to claim for their wages under the Coronavirus Job Retention Scheme ('furloughed'), they can still request and take their holiday in the usual way. This includes bank holidays.

Employees and workers must get their usual pay in full, for any holidays they take.

However, it is not known whether this merely reflects the view of Acas (i.e. their guess is only as good as anybody else’s) or whether they have received an indication from the government or HMRC as to how the Scheme will operate in this regard. Also:-

  1. Note that Acas state that an employee can request to take holiday: what if they prefer to not do so, and to keep the holiday (including that would otherwise have fallen on a bank holiday) back to use at a later date?
  2. Query whether, if employees can (one way or another) take holiday without breaking the continuity of furlough, the Scheme will require that employees must receive full pay, or whether an employee’s entitlement to holiday pay will be subject to the general law – which has its complexities (see further below).

To add to the mix, it is reported that HMRC customer support has responded to an enquiry on twitter as to whether the Easter bank holidays will break furlough as follows:

If an employee is on holiday or has a scheduled bank holiday whilst on furlough, they are entitled to still receive this holiday. Employers must ensure that any employee on holiday or a bank holiday is paid their full salary for that holiday.

This is consistent with the Acas guidance, but leaves the same questions posed above outstanding.

The state of uncertainty on this issue is reflected in the FAQs issued by the House of Commons Library, but these developments do provide cause for hope that there will be further government guidance clarifying that holiday can be taken during furlough.

In the meantime, it remains prudent that in order to preserve funding, unless and until the government confirms that the position is to the contrary, employers ensure that no days during furlough (including bank holidays) will be treated as paid annual leave if this will, or might, be contrary to the Scheme – whilst reserving the right to reinstate as holiday any days which were treated other than as such because of this proviso in the event that the government confirms that this is not contrary to the Scheme.

To the extent employees are to take holiday whilst furloughed, absent any special provisions related to the Scheme, the extent of the holiday pay entitlement will depend on the contract of employment or, as regards the element of it which constitutes part of an employee’s minimum entitlement to 5.6 weeks’ holiday under the Working Time Regulations, if more favourable, then as provided for under those regulations.


It has been reported that David Johnston MP emailed HM Treasury with an enquiry as to the application of the Scheme in a TUPE situation, and that it replied on 6 April that:

…employers that have undertaken a TUPE transfer or a similar transfer after 28 February are eligible for the Coronavirus Job Retention Scheme.

Hopefully, therefore, we can expect further updated guidance from the government to the effect that employees who were on a transferor’s payroll on 28 February and who subsequently transferred, or transfer, to a new employer under TUPE can be furloughed under the Scheme.

If so, then;-

  1. Will it also be clarified that for any period of furlough which commenced less than 3 weeks before the transfer, the transferor can claim payment under the Scheme even though transferring employees will not have been on furlough with the transferor for 3 weeks?
  2. Will the transferee be provided with the right to access to transferor’s payroll records for the purposes of determining the historic pay of furloughed employees on variable pay that is necessary to determine payments to be made under the Scheme?

The operation of the Scheme

On 8 April, senior representatives of HMRC appeared before a parliamentary select committee to answer questions around the Scheme. Their answers included the following:

  • The portal is to be open on 20 April and the first payments should be made on 30 April.
  • Live testing on the portal started on 8 April with a small number of employers.
  • Guidance is to be published within the next week which will enable employers to get their first claims ready for 20 April.
  • Employers will be able to make one claim per pay period – weekly, if they operate weekly payroll, or otherwise monthly.
  • Employers will be able to submit claims up to 14 days ahead of pay dates and the aim will be for HMRC to make payments within 4 – 6 working days of receiving claims.
  • There are no plans to extend scheme to the employees who started after 28 February.
  • There is to be a hotline for employees who are made to work whilst supposedly furloughed under the Scheme to report employers.
  • HMRC will investigate employers for possible breaches of the rules of the Scheme. If there is evidence of breaches of rules, employers’ claims won’t be paid out and in appropriate cases there could be criminal prosecutions for fraud.

For our regularly-updated wider guidance for employers on the impact of the virus outbreak, click here.

For advice on any of these issues, call us on 0800 294 5927 or click here to make an on-line enquiry.