Following the decision to extend the Coronavirus Job Retention Scheme (CJRS) to 2 December (LELR 696), the government belatedly announced a further extension to 31 March 2021. A new Treasury Direction (TD) was issued on 13 November 2020 making clear that the extension is needed following the measures taken due to a resurgence of coronavirus (COVID-19). The principal purpose remains the same - namely to support workers and businesses impacted by the pandemic. Guidance for employees and employers was also updated on 19 November 2020. In this article, we consider who is covered, how furlough pay is calculated and other key changes. 

The extension to the CJRS

The extended CJRS will apply from 1 November until 31 March 2021 and is broadly the same as that which applied in August of this year. Employers can therefore retain employees on their payroll and put them on furlough (either fully or flexibly), provided there has been suitable individual notification and acceptance; or a collective agreement has been entered into or extended with a recognised trade union that provides for this. 

There is no limit to the number of employees who can be furloughed and the CJRS is not restricted to employers whose businesses have had to close during the current lockdown or who may be subject to the more stringent restrictions under the tiered regime.

Employees who are fully furloughed will receive 80 per cent of their usual wages up to a maximum of £2,500 gross per month for hours not worked. Where a worker is on flexible furlough, the employer will pay their normal wages for the hours they work and at least 80 per cent of their wages for the period in which they are furloughed.  The maximum cap is adjusted for those on flexible furlough taking into account the hours not worked. 

Employers are only required to pay national insurance and pension contributions, although they can also top up furlough pay above the minimum 80 per cent.

Although the TD extends the CJRS to 31 March 2021, it only applies to the period covering 1 November 2020 to 31 January 2021. A further TD will therefore need to be made to cover the scheme applying after 31 January 2021. The government will review the CJRS in January 2021 and depending on the economic circumstances, will decide whether to request that employers make a contribution to the pay of those furloughed.

Who does the extended CJRS apply to?

Under the extended CJRS, employees who were employed on 30 October 2020 can be either fully furloughed or flexibly furloughed from 1 November 2020 as long as they are paid by PAYE and the employer made a Real Time Information (RTI) submission to HMRC between 20 March 2020 and 30 October 2020 notifying them that a payment of earnings was made. There is no requirement that a worker has to have previously been furloughed so those recently recruited will now be covered.

What about employees who were made redundant?

Employees who were on the pay roll on 23 September and have since been made redundant or whose employment ceased, can be re-employed and furloughed under the new scheme. All that is required is that the employer made a Real Time Information (RTI) submission to HMRC between 20 March 2020 and 30 October 2020 notifying a payment of earnings for that employee. 

Those on fixed-term contracts which expired on or after 23 September 2020, can also be re-employed and furloughed as long as they were employed on 23 September 2020 and the employer made a PAYE RTI submission to HMRC for the same period.

There is no legal obligation on an employer to re-employ employees in these circumstances and in practice it is likely to be rare. However, unions can remind employers of this option should the government’s much vaunted economic improvement actually materialise over the next three months.

Are those shielding or have caring responsibilities covered?

While the CJRS is not intended to apply to those on short-term sickness absence, the employer’s guidance states that employees can be furloughed if they are unable to work because:

  • They are clinically extremely vulnerable, or at the highest risk of severe illness from coronavirus (COVID-19); or
  • They have caring responsibilities resulting from coronavirus (COVID-19), including employees who need to look after children.


What is the position of employees who have been subject to a transfer?

In a TUPE situation, employees who were employed by an employer before 31 October 2020 and who transfer from their old employer to their new employer after 31 August 2020, are eligible to be furloughed. In that case either the old or new employer will have to have made a PAYE RTI submission in respect of the employee to HMRC, between 20 March 2020 and 30 October 2020, notifying a payment of earnings.

Can those on maternity and family leave be furloughed?

An employee returning from maternity, adoption, shared parental leave or parental bereavement leave can decide to end their maternity leave early in order to be eligible for furlough leave provided they give at least eight weeks’ notice of their return to work. However, as there is no right to be furloughed there is no guarantee that the employer will furlough them. Employees who may be considering returning early should contact their union representative for advice in the first instance.

What is the position of those under notice?

An employer cannot claim the CJRS grant for employees who are under notice of termination of employment for any reason between 1 December 2020 and 31 January 2021 including those serving notice for retirement or who have tendered their resignation. It is not clear if this provision will extend to February and March 2021. Unions should remind employers of the obligation to collectively consult where the employer proposes to dismiss as redundant 20 or more employees at one establishment within a period of 90 days. Consultation must be with the appropriate representatives of any of the employees who may be affected, which will be the union where it is recognised in the workplace.  

How is furlough pay calculated?

The calculation varies depending on whether the employee is employed on a fixed rate or their pay varies, as follows:

Fixed- rate employees:

  • For those who are only eligible under the new scheme (for instance, those who started work after the cut-off date of 19 March 2020), furlough pay is based on the pay received on the last pay period ending on or before 30 October 2020.
  • For those who were eligible to be furloughed (that is, those who were either employed on or after 19 March 2020 and the employer included them on an RTI submission on or before that date or who had been furloughed and received furlough pay) any time on or before 31 October 2020, furlough pay is based on the last pay period ending on or before 19 March 2020. This includes those who were not actually furloughed prior to 31 October 2020.


Employees whose pay varies:

  • For those who are only eligible under the new scheme, furlough pay is based on the average pay between the date they started employment or 6 April 2020 (whichever is later) and the day before their CJRS extension furlough period begins inclusive.
  • For those who were eligible to be furloughed, even if they were not actually furloughed any time on or before 31 October 2020, furlough pay is based on the higher of the wages earned in the corresponding calendar period in the tax year 2019 to 2020 (e.g. November 2019), or the average wages payable in the tax year 2019 to 2020.


Information about employers who claim

HMRC will publish the following information about employers who claim for periods in December 2020 and January 2021:

  • The employer’s name;
  • An indication of the value of the employer’s claim; and
  • The company number for companies and Limited Liability Partnerships (LLPs).


The extension of the CJRS in favour of the less generous Job Support Scheme throws a much-needed lifeline to help employers keep workers in work, though sadly it was announced far too late to save many jobs. Unions will want to maintain an ongoing dialogue with employers as to plans for the future, particularly as the government will be reviewing the position in January 2021.

You can read the Treasury Policy in full here.

You can read the Treasury Direct in full here.

Find the latest employee guidance here.

Find the latest employer guidance here.

Find the latest employer guidance on calculating furlough pay 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