On 12 May 2020 the Chancellor announced an extension to the Coronavirus Job Retention Scheme (CJRS). The scheme, which was originally made public on 20 March 2020 and opened for claims on 20 April 2020, was due to end on 31 May 2020 and then 30 June 2020 and now it will run until at least 31 October 2020. The CJRS guidance was updated on 14 May to reflect this extension.

The CJRS sets out the basis upon which employers can claim reimbursement for a proportion of the earnings for someone who is on the employer’s PAYE payroll on or before 19 March 2020 and is furloughed for a minimum period of three weeks. It does not interfere with or override any of an employee’s existing contractual or statutory rights. Under the terms of the CJRS employers can apply for grants of 80 per cent of furloughed UK employees’ gross monthly earnings, subject to a cap of £2,500.

The extension of the CJRS was welcome news to both employers and employees alike, providing a lifeline at this very difficult time. A decision to end the scheme on 30 June could potentially have led to large scales job losses and catastrophic economic consequences. 

The CJRS will run until the end of July 2020 in precisely the same way as it has up until now. However, the Chancellor has made clear that from 1 August 2020 he will want employers to contribute towards the costs of the scheme. The detail of how that will work is as yet unknown though the government has indicated a further announcement will be made on this at the end of May.

One anticipated change to the CJRS is allowing furloughed workers to work for their employer part-time in contrast to the current terms of the CJRS where workers are not permitted to undertake any work at all if a claim is made on their behalf. What remains unclear is whether it will only be those employers who bring back workers on this basis who will be required to make contributions or whether the obligation to contribute to workers’ salaries will extend to all those furloughed.

The government has also said it is exploring ways to support furloughed workers who wish to do additional training or learn new skills. Again, further detail is awaited.

Has the CJRS made a difference?

Since its creation, the CJRS has supported 7.5 million workers from approximately 1 million UK businesses at a cost to the Exchequer of approximately £10.1 billion. This has undoubtedly made a significant difference with many private sector employers and their employees relying heavily on it to maintain jobs and income streams. While some have questioned the affordability of the scheme, the reality is that it is likely to cost only a fraction of the sums spent bailing out banks in the financial crisis and the financial consequences of inaction would have been far greater.

While the extension is undoubtedly good news, careful thought will need to be given to ensuring that there is ongoing flexible support for employers and workers in sectors of the economy which are not able to operate on a pre-coronavirus (COVID-19) basis for a protracted period. For example, workers in the hospitality sector will need extra assistance over an extended period and there is no guarantee that the government, even by the end of October 2020, will be able simply to pull up the drawbridge without significant consequences.

Has the CJRS solved all problems in the short-term?

 Notwithstanding, the introduction and implementation of the CJRS problems persist in the here and now. The number of people claiming unemployment allowance soared to 2.1 million in April and analysis by the Office for National Statistics found the number of people claiming benefits primarily for the reason of being unemployed jumped by 69.1 per cent. This indicates that many employers have pressed on in making redundancies regardless of the lifeline provided by the CJRS. Some who have gone into liquidation have chosen not to avail themselves of the option to furlough their staff despite it being established they could in the litigation Thompsons was involved in on behalf of Unite the Union. And then there are a number of UK employers who have commenced large scale collective consultation redundancy exercises notwithstanding the announcement of the extension of the CJRS until the end of October 2020.

Redundancy programmes will undoubtedly be challenged in courts and employment tribunals in due course by unions and others, but meanwhile workers will, given the CJRS ‘umbrella’ available, needlessly suffer. Workers will be forced to fall back on what the Labour Party has been quick to identify as one of the weakest out-of-work benefit regimes in the developed world. One of the consequences of coronavirus (COVID-19) may hopefully, as workers are forced to face the reality of a work crisis be greater rights, and means to enforce those rights, both within the workplace and when they find themselves out of work.


Challenging times undoubtedly lie ahead. We have referred above to the fact that some employers are ploughing on with redundancy exercises notwithstanding the current support provided by the CJRS. We are also aware that other employers are seeking to put forward new less favourable terms and conditions for prescribed or unprescribed periods of time as a consequence of the pandemic. In our Briefing on Employer and Employees' Responsibilities No 7 we analyse, among other things, the considerations which will arise in these circumstances. 


You can read the employers guidance on the CJRS in full here.

You can read the employees guidance on the CJRS in full here

Articles shared by Thompsons relating to coronavirus (COVID-19) are correct at the time of publication. You should check the government's guidelines for the latest information and advice at https://www.gov.uk/coronavirus.