Five from 5: Furloughing

Message from the Editor, Dan Hobbs: 

This is a special edition produced to answer many of the employment law questions arising out of the present COVID-19 pandemic.

On 1 April 2020, Alastair Hodge and Claire Palmer delivered a virtual webinar as part of 5 Essex Court’s Sofa Series, which is now available on YouTube. In the meantime here are their 5 key points on (i) furloughing staff; (ii) statutory sick pay; (iii) holiday pay; (iv) health and safety detriments; and (v) the concept of maintaining standard employment concepts. 

Many thanks to Alastair and Claire for their hard work in putting together this comprehensive COVID-19 employment guide.  

Anyone wishing to join the 'Five from 5' mailing list should email the team at Alternatively, should you wish to take your name off the mailing list, you can do so by clicking on the link at the bottom of this bulletin.


The detail of the Government’s Job Retention Scheme is currently set out in Guidance on the government's website (latest version dated 17 April 2020

There are no Regulations setting out its application but, on 15 April 2020, the Chancellor made a Treasury Direction to HMRC (under s.71-72 of the Coronavirus Act 2020). It looks likely that there will be no separate Regulations and it will simply be governed by the above Guidance  and the Treasury direction (

Key provisions on furloughing staff are:

  • Employees must be furloughed for a minimum of 3 weeks’ (21 calendar days).
  • The employee must have been on the company’s payroll on or before 19 March 2020 (the Government extended this on 15 April 2020 from the original cut off date of 28 February 2020). Alternatively, if they were employed as of 28 February and on payroll but made redundant or stopped working for the employer after 28 February but before 19 March, they can qualify if they are re-employed and then furloughed.
  • The Treasury Direction requires the employer to instruct and agree with the employee (in writing) that they will cease all work for a minimum of 21 calendar days and the instruction must be given by reason of circumstances arising as a result of coronavirus.
  • It applies to all types of employment contract including full time, part time, officeholders, salaried members of LLP, agency, limb (b) workers on flexible or zero hour contracts (as long as they are paid by PAYE) and includes foreign national employees.
  • The Government will cover up to £2,500 (or 80% where lower) of their usual monthly wage costs plus the associated employer NI contributions.
  • Employees cannot do any work for, or on behalf of the organisation during furlough, although they can do training (subject to being paid the Living Wage minimum for any time spent training) and volunteering (as long as it does not breach the above).
  • It applies to any entity with a UK payroll including businesses, charities, recruitment agencies, individuals and public authorities.
  • The precise position regarding annual leave remains unclear as to whether it can be taken during the 3 week period, although the latest suggestion from ACAS is that it can be (see below).

2-1Statutory Sick Pay

Three new sets of Regulations amend the rules relating to Statutory Sick Pay (“SSP”) where the ‘incapacity’ is linked to coronavirus:

In summary, a worker is entitled to SSP from the first day of absence where it relates to coronavirus either due to illness, where the worker is isolating at home due to suspected symptoms or where they are isolating due to other members of their household having had suspected symptoms.

It applies to incapacity for work that arose on or after 13 March 2020.

New provisions are to be brought in to allow UK based businesses with less than 250 employees as of 28.2.2020 to claim back from the Government up to 2 weeks’ SSP where it relates to coronavirus. Employers need to maintain records of staff absences but not need to provide a fit note.

Employees and workers may be able to obtain an isolation note from NHS 111 online.


Holiday Pay 

Furloughed employees continue to accrue leave as per their employment contract.
The employer and employee can agree to vary holiday entitlement as part of the furlough agreement, however almost all workers are entitled to 5.6 weeks of statutory paid annual leave each year which employers cannot go below.

Employees can take holiday whilst on furlough. Working Time Regulations require holiday pay to be paid at the employee’s normal rate of pay or, where the rate of pay varies, calculated on the basis of the average pay received by the employee in the previous 52 working weeks. Therefore, if a furloughed employee takes holiday, the employer should pay their usual holiday pay in accordance with the Working Time Regulations (which will be a rate exceeding the government's 80% grant).

Employers will have the flexibility to restrict when leave can be taken if there is a business need. This applies for both the furlough period and the recovery period.

If the employee usually takes bank holidays as leave then with regards bank holidays falling within the furlough period, the employer would either have to top up the employee's pay (i.e above the 80% grant), or give the employee a day of holiday in lieu.

Under the Working Time (Coronavirus) (Amendment) Regulations 2020, regulation 13 of the Working Time Regulations has been amended to permit a worker to carry over the statutory 4x weeks of annual leave where it was not reasonably practicable for a worker to take some or all of the leave as a result of the effects of coronavirus. Reasonable practicability includes an examination of the effects of COVID-19 on the worker, the employer or the wider economy. In suitable circumstances, holiday may be carried forwarded and taken in the following two leave years.


Health and Safety Detriment and Dismissal

Employees will be rightly concerned for their own health and safety as well as that of their co-workers and others in their household. Section 44 of the Employment Rights Act 1996 provides that employees may not be subjected to a detriment because they have raised a relevant health and safety concern with their employer (such as the unavailability of PPE).

Accordingly, if an employee walks out of the workplace or refuses to return to the workplace in circumstances of danger which the employee reasonably believes to be serious and imminent, the employee cannot be subjected to a detriment by his employer as a result. 

If an employer were to take disciplinary action or withhold pay (or impose any other detriment) in such circumstances because the employee has raised a relevant health and safety concern, they will be in breach of s.44 and likely to face proceedings in the Employment Tribunal.

Likewise, if the employee is dismissed for that reason, they will have a claim under s.100 ERA for automatic unfair dismissal. There is no qualifying period of employment to bring such a claim and interim relief is available.


Standard Employment Concepts Apply

Whilst business, employment and our way of life has changed beyond recognition, employment law remains the same in that the relationship is governed by the contract of employment and the existing employment statutes and regulations (see government guidance:

With the exception of new Regulations relating to the payment of SSP and annual leave, as of 7 April 2020, there is no new employment specific legislation. Employers and employees should have regard to the Health Protection (Coronavirus, Restrictions) Regulations 2020 which came into force on 26 March 2020 (and any subsequent legislation) and the Guidance for Employees and Employers on the website.

Particular regard should be had by employers and employees to the individual contract of employment (including any collective agreements and implied terms), health and safety legislation, the common law duty of care and the Equality Act 2010 in respect of the duty not to discriminate (and to make reasonable adjustments in respect of disabled employees).

Written by Dan Hobbs

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