Coronavirus Job Retention Scheme (CJRS) – What Can & Can’t Employees Do Whilst Furloughed?

The Coronavirus Job Retention Scheme (CJRS) (also referred to as the furlough scheme) was first introduced back in March 2020 to help support businesses and employees through the pandemic and to assist the UK economy’s recovery.

Under the rules of furlough, it was clear that in order to be eligible to be claimed for under the CJRS, an employee could not undertake work for or on behalf of the employer’s organisation, or any organisation linked or associated with the employer’s organisation whilst on furlough. This included providing services or generating revenue for any such organisation.

Below, we have answered some FAQs on what employees could and could not do whilst furloughed.

What could employees do and not do whilst furloughed

Could employees undertake training whilst furloughed?

Yes, a furloughed employee could undertake study and training, i.e. to maintain their skill set or upskill themselves whilst furloughed, as long as the purpose of it was to improve the employee’s effectiveness in their employer’s business or the performance of their employer’s business. Any study or training undertaken must not have provided services to, contributed to the business activities of or generated revenue for or on behalf of the employer who has placed them on furlough (or any linked or associated organisation of the employer).

If an employee was required to undertake any training whilst furloughed, i.e. to complete an online course, they must have been paid the relevant national minimum wage in respect of any time spent training, even if this was more than 80% of their wage, as this qualified as working time for the purposes of the legislation. This may mean that employers were not able to reclaim the total amount paid to employees in respect of periods spent training.

Could employees carry out volunteer work whilst furloughed?

Yes, a furloughed employee was entitled to take part in volunteer work whilst furloughed, including volunteer work that had been organised by the employer that had furloughed them, as long as it did not provide services to or generate revenue for or on behalf of the employer who had placed them on furlough (or any linked or associated organisation of the employer).

Employers were also permitted to help find their furloughed employees volunteering opportunities whilst on furlough.

Could an employer make contact with furloughed employees generally?

Most employers wanted to keep in touch with their employees during furlough leave from a relations point of view. At Nelsons, our view was that employers could and indeed should maintain contact with employees during furlough to keep them in the loop and provide them with any important updates on how the business was operating and reassure them that they have not been forgotten about just because they are not working and/or visible. ACAS guidance recommended that any furlough agreement should set out how to keep in contact during furlough.

Employees could therefore be able to be involved in social and charitable events, be informed and consulted about changes happening within the business and take part in HR matters, such as giving evidence in disciplinary proceedings.

Further, the Government has previously confirmed that whilst on furlough, an employee was still permitted to undertake union or non-union representative duties and activities for the purposes of individual or collective representation of employees or other workers, as long as they did not provide services to or generate revenue for or on behalf of the furloughed employer or any linked or associated organisation.

Notwithstanding the above, it was key that employers bear in mind that employees must not do any work that makes money for the organisation or provides services to the organisation or any linked or associated organisation, as this was prohibited under the CJRS.

Could an employer require employees to attend business meetings whilst furloughed?

No, on the basis that this would arguably amount to providing services to the furloughing employer.

Could an employer require employees to check their emails?

No, on the basis that it would have arguably amounted to providing services to the furloughing employer. There was also a risk that employees would respond to emails received or action points contained in emails, which would have been in breach of the CJRS, even if an employee only replied to one or two emails.

We suggested that employers considered revoking furloughed employees’ access to their work emails and either set up automatic forwarding of emails sent to those who were furloughed or permitted a line manager to have access to the email inbox for the period of furlough.

Could employers require employees to undertake a handover of their duties whilst furloughed?

We previously recommended that employers spoke to employees they wish to furlough at the point of furloughing them regarding the employee’s workload and tasks that needed to be completed in order to effect a full handover. There was a risk that providing handover information whilst an employee was furloughed amounted to providing services to the organisation or even generating revenue for the organisation, which would have been in breach of the CJRS.

Could a furloughed employee participate in any promotional activity?

No, on the basis that marketing activity is ordinarily carried out with the purpose of generating revenue for the furloughing employer.

What if an employer urgently needed employees to carry out work but they were on full-time furlough?

If an employer needed certain work to be carried out that an employee on full-time furlough would have usually undertaken, and there was no one else working within the organisation that could assist or pick up the work in the absence of that person, they had the option of either taking that employee off furlough altogether or placing them on flexible furlough.

What were the consequences of allowing or requiring employees to work whilst furloughed?

If an employer asked its employees to carry out work whilst, on furlough, the employer was jeopardising their right to claim back the wages in respect of those employees that were carrying out work for the period during which they were undertaking the work under the CJRS. The employer could also face fines and other penalties imposed by HMRC.

In addition, if employees carried out work for their employer that was not permitted under the CJRS, this was likely to be viewed as ‘breaking’ the period of furlough.

HMRC had the right to retrospectively audit all aspects of any claim under the CJRS and if it came to light that an employer had claimed wages in respect of a furloughed employee who was still carrying out work whilst furloughed, the employer would be held to be in breach of the CJRS and liable to repay any monies paid either during that period or potentially any monies paid under the CJRS at all.

A breach of the CJRS would only affect employees (in monetary terms) if the furlough agreement between the employer and the employee contained terms providing that the employee has to repay monies received during any period of furlough in the event that HMRC withheld monies or required repayment. If the furlough agreement did not contain such a term, then technically the employee would not have to reimburse the employer for monies paid whilst on furlough in order for the employer to then reimburse HMRC.

Who would find out if employers were asking their employees to do work?

The Treasury Direction made it very clear that a CJRS claim could not be made in respect of an employee if it was abusive or contrary to the purpose of the CJRS. It was arguable that claiming wages in respect of an employee who was still carrying out work that was not permitted under the CJRS would amount to abuse.

As above, HMRC had the right to audit claims and the Government guidance stated that payments could be withheld or need to be repaid in full to HMRC if any claim was found to be fraudulent or based on dishonest or inaccurate information.

The Finance Act provided businesses who accessed the CJRS a 90-day grace period for reviewing their compliance with the scheme, allowing them to self-report any issues to HMRC and take the necessary action to rectify non-compliance, meaning that they would most likely avoid any penalties or fine.

HMRC  put in place an online portal for the public and employees to report suspected fraud in the CJRS and this was encouraged.

Accordingly, if an employer required employees to carry on work whilst furloughed and claimed their wages back under the CJRS, the employee or anyone with knowledge of this, i.e. the employee’s friends or family, could report that.

Could an employee be disciplined for refusing to work whilst furloughed?

No, and it would have been unreasonable for an employer to proceed to subject an employee to disciplinary proceedings whilst furloughed for this reason. The employer had to offer furlough to an employee for them to be able to be furloughed, and that offer was made in the knowledge of the rules of the scheme which, amongst other things, prohibited an employee from carrying out work for the furloughing employer whilst furloughed.

A furloughed employee was not absent without leave and it was difficult to identify how an employer might frame a refusal to work whilst furloughed as misconduct when this was in accordance with the rules of the CJRS.

What if the employee was conscientious and did work without the employer requiring that?

If an employee carried out work without the employer requiring this or knowing the work was being carried out, this could still have amounted to providing services and/or generating revenue for or on behalf of the organisation and prejudice the employer’s ability to claim wages under the CJRS.

As above, in order for an employer to keep control and check over what an employee was or was not doing whilst furloughed, we recommended that employers considered revoking the furloughed employee’s access to work emails and making it clear in the furlough agreement that an employee was not permitted to carry out work whilst furloughed. Employers could also have considered making it a disciplinary offence to work whilst furloughed in order to discourage employees from doing this.

What about working for another employer whilst furloughed?

The Government previously confirmed that an employee who had been furloughed from their current job could take on a new job, provided it was permitted by their contract of employment. For example, certain contracts of employment provided that an employee must not work for another employer during the course of their employment with the organisation during working hours or without prior written consent. If this was the case, we recommended that parties agreed to a variation to the terms of the contract in writing on a temporary basis or that the employer provided written consent, specifying that this only applied in relation to any period of furlough whilst the pandemic was ongoing.

It is worth noting that there was no obligation on an employer to permit an employee to work for another employer whilst furloughed if this was prohibited by the contract of employment, although the employee would have had a valid argument that any alternative work would not have been interfering with their work for the furloughed employer, as no such work was required.