Important: The Coronavirus Furlough Scheme Has Ended

The Coronavirus Job Retention Scheme, commonly known as the furlough scheme or CJRS, ended on 30 September 2021.

Employers can no longer:

• Place employees on CJRS furlough
• Make new furlough claims under the scheme
• Claim government support towards wages under the CJRS

The final ordinary deadline for employers to submit a claim relating to September 2021 was 14 October 2021.

This page explains how furlough operated historically and, more importantly, what rights may apply today if your employer wants to temporarily reduce your work, hours or pay.

What Was Furlough Leave?

Furlough was a temporary arrangement introduced during the coronavirus pandemic under which employees remained employed but stopped working some or all of their usual hours.

The Government provided financial support to employers through the Coronavirus Job Retention Scheme.

An employee on furlough:

• Remained employed
• Continued to have an employment contract
• Retained statutory employment rights
• Could receive furlough pay for hours not worked
• Could return to their normal work when furlough ended
• Could still potentially be made redundant

Furlough was not itself a permanent change of employment status.

How Much Were Employees Paid Under the Furlough Scheme?

The amount contributed by the Government changed during the life of the scheme.

For significant periods, furloughed employees were entitled to at least 80% of their usual wages for furloughed hours, subject to a monthly cap of £2,500.

Towards the end of the scheme:

• In July 2021 the Government contributed 70% up to the applicable cap
• In August 2021 the Government contributed 60%
• In September 2021 the Government contributed 60%

Employers were required to contribute the difference necessary to bring furlough pay for unworked hours up to the required 80% level.

Employers could voluntarily pay employees more than the minimum furlough amount, including topping wages up to normal contractual pay.

Could an Employer Force an Employee to Accept Furlough?

Not simply because the furlough scheme existed.

Placing an employee on furlough could involve changes to contractual arrangements, particularly where:

• The employee stopped working
• Working hours changed
• Pay was reduced
• Other contractual arrangements changed

Employers therefore generally needed an appropriate contractual basis or the employee's agreement.

The existence of a general flexibility clause in an employment contract did not necessarily give an employer unlimited authority to impose substantial changes.

For more information about changing contractual terms, see Contracts of Employment.

Did Furlough Arrangements Have to Be Recorded in Writing?

Yes.

For the purposes of the CJRS, the relevant furlough arrangement had to be agreed or confirmed in writing in accordance with the scheme requirements.

Electronic confirmation, such as an email, could satisfy the written requirement.

Employers were required to retain the relevant furlough agreement or written confirmation for at least five years.

What Could a Furlough Agreement Include?

Depending on the circumstances, a written furlough arrangement could address matters such as:

• Furlough start date
• Whether furlough was full or flexible
• Working hours
• Furloughed hours
• Amount of pay
• Whether the employer would top up salary
• Holiday arrangements
• Benefits
• Notice of return to work
• How furlough could be brought to an end
• Confirmation that other contractual terms continued
• Statutory family and employment rights

The precise arrangement varied between employers.

Could an Employee Choose to Be Furloughed?

No.

Employees did not have a statutory right to demand furlough.

The employer needed to participate in the scheme and enter into an appropriate arrangement with the employee.

An employee could ask to be furloughed, but the employer did not generally have to agree.

Could Employees Work While Furloughed?

Not during hours for which the employer was claiming furlough support.

Under the scheme, an employee could not perform work that:

• Provided services to the employer
• Generated revenue for the employer
• Provided services to an associated organisation

However, the rules later allowed flexible furlough.

Under flexible furlough, an employee could:

• Work some of their normal hours
• Be paid normally for those working hours
• Remain furloughed for the remaining eligible hours

The employer could claim only for qualifying furloughed hours.

What Was Flexible Furlough?

Flexible furlough allowed employees to return to work for part of their normal working pattern while continuing to receive furlough support for hours they did not work.

For example, an employee who previously worked five days per week might:

• Work two days
• Be furloughed for three days

The employer had to pay the normal contractual rate for hours actually worked and could only claim furlough support for eligible hours not worked.

Could Company Directors Be Furloughed?

Certain company directors who were paid through PAYE could historically be furloughed under the scheme.

During furloughed hours, they were generally restricted from performing ordinary revenue-generating work.

However, directors could carry out limited statutory duties required to fulfil legal obligations arising from their office as a director.

For further guidance about directors generally, see Directors and Employment Rights.

Could Someone Have Another Job While Furloughed?

Potentially.

The CJRS did not necessarily prevent an employee from:

• Working for another existing employer
• Starting a new job
• Being furloughed by one employer while continuing to work for another

However, the employee still needed to comply with their employment contract.

Relevant restrictions could include:

• Exclusivity clauses
• Restrictions on competing work
• Confidentiality obligations
• Working-time requirements

Did Employment Rights Continue During Furlough?

Yes.

Employees remained employed while furloughed.

Depending on their circumstances, statutory rights continued to apply in areas including:

• Holiday
• Maternity rights
• Family leave
• Statutory Sick Pay
• Redundancy rights
• Notice
• Unfair dismissal
• Discrimination
• Continuity of employment

Furlough did not suspend ordinary employment-law protection.

Did Holiday Continue to Accrue During Furlough?

Yes.

Employees generally continued to accrue statutory annual leave while furloughed.

Contractual holiday above the statutory minimum could also continue depending on the terms of the employment relationship.

Could Employees Take Holiday During Furlough?

Yes.

Employees could take annual leave while furloughed, subject to the normal process for requesting and approving holiday.

Holiday pay had to be calculated according to the normal holiday-pay rules rather than simply using a reduced furlough rate.

Where necessary, the employer had to increase the payment so that the employee received the correct holiday pay.

Could an Employer Require Holiday to Be Taken During Furlough?

Potentially.

Employers could require workers to take annual leave, provided the appropriate legal notice was given.

As a general rule, an employer requiring a worker to take holiday must give notice of at least twice the length of the holiday being required, unless another arrangement applies.

What Happened to Contractual Benefits During Furlough?

Furlough did not automatically cancel contractual benefits.

Depending on the contractual terms, benefits might include:

• Private medical insurance
• Life assurance
• Death-in-service benefits
• Company cars
• Other employment benefits

If an employer wanted to change contractual benefits, it needed to consider the normal rules relating to contractual variation.

Could Someone Be Made Redundant While Furloughed?

Yes.

Furlough did not prevent an employer from beginning or completing a redundancy process.

Employers still needed to comply with ordinary redundancy law.

Depending on the circumstances, this could include:

• Genuine redundancy reasons
• Consultation
• Fair selection
• Consideration of alternative employment
• Appropriate notice
• Statutory redundancy pay where eligible

Being furloughed was not itself a fair reason for dismissal.

For further information, see Redundancy.

Did Employers Have to Use Furlough Instead of Redundancy?

No.

The existence of the CJRS did not create an absolute obligation requiring employers to furlough employees instead of making redundancies.

However, while the scheme was operating, an employer considering redundancy might reasonably have been expected to consider whether furlough represented a viable alternative in the particular circumstances.

Whether a redundancy dismissal was fair depended on the circumstances at the relevant time.

How Were Redundancy and Notice Pay Calculated for Furloughed Employees?

Special rules were introduced during the pandemic to protect employees whose pay had been reduced because they were furloughed.

Where applicable, statutory redundancy and certain statutory notice calculations were based on the employee's normal pre-furlough pay rather than the temporarily reduced furlough amount.

These provisions were designed to prevent employees losing statutory termination rights simply because they had participated in the CJRS.

Could Some Employees Be Furloughed While Others Were Made Redundant?

Yes.

Employers were not required to furlough every employee.

However, decisions concerning:

• Furlough
• Recall to work
• Redundancy selection
• Other employment treatment

still needed to comply with discrimination law.

An employer could potentially face a claim if decisions were influenced unlawfully by a protected characteristic.

For further guidance, see Discrimination.

Could Fixed-Term Employees Be Furloughed?

Eligible fixed-term employees could historically be included in the CJRS.

Employers could also agree to extend qualifying fixed-term contracts in appropriate circumstances.

However, furlough did not remove the employee's underlying fixed-term employment rights.

See Fixed-Term Contracts.

What Happened When Furlough Ended?

When an individual employee's furlough arrangement ended, they generally remained employed unless their employment was separately terminated.

Possible outcomes included:

• Returning to normal duties
• Returning on different agreed terms
• Continuing under flexible working arrangements
• Restructuring
• Redundancy
• Another agreed employment arrangement

At the end of the CJRS itself on 30 September 2021, employers could no longer claim government furlough grants.

What Applies Now That Furlough Has Ended?

Can Your Employer Put You on CJRS Furlough in 2026?

No.

There is currently no Coronavirus Job Retention Scheme under which an employer can place you on furlough and recover part of your wages from the Government.

If an employer now says it wants to "furlough" employees, it is important to establish what it actually means.

It may instead be proposing:

• Temporary unpaid leave
• Lay-off
• Short-time working
• Reduced hours
• Reduced salary
• A temporary contractual variation
• Redundancy

Each has different legal consequences.

Can Your Employer Temporarily Send You Home Without Work?

Potentially.

Where there is temporarily insufficient work, an employer may consider lay-off.

A lay-off generally means an employee is temporarily provided with no work.

An employer may also use short-time working, where the employee continues working but their hours are temporarily reduced.

However, employees should generally continue receiving their normal pay unless:

• Their employment contract permits unpaid or reduced-pay lay-off
• A relevant collective arrangement permits it
• They agree to the change

Without a lawful basis, withholding contractual pay can potentially amount to a breach of contract or unlawful deduction from wages.

What is Statutory Guarantee Pay?

Employees who are lawfully laid off or placed on short-time working may qualify for statutory guarantee pay for qualifying workless days.

As at September 2026, the maximum is:

• £41 per day
• Up to five days in any three-month period
• Maximum £205 in a three-month period

If your normal daily earnings are below £41, the payment is generally limited to your normal daily rate.

Eligibility conditions also apply.

Can Lay-Off or Short-Time Working Lead to Redundancy?

Potentially.

An eligible employee who receives less than half a week's pay because of qualifying lay-off or short-time working may potentially claim statutory redundancy after:

• Four or more consecutive weeks
• Six or more weeks within a 13-week period

The employee generally needs at least two years' continuous service for statutory redundancy pay and must follow a specific statutory procedure.

There are strict rules concerning:

• Written notice to the employer
• Time limits
• Employer counter-notice
• Resignation after the claim is accepted

You should therefore check the procedure carefully before resigning.

Can Your Employer Reduce Your Hours or Pay Instead?

An employer may propose reducing hours or pay where the business is experiencing financial or operational difficulties.

However, significant contractual changes will normally require an appropriate contractual basis or agreement.

If your employer attempts to impose a substantial change without agreement, possible issues can include:

• Breach of contract
• Unlawful deduction from wages
• Working under protest
• Constructive dismissal in sufficiently serious cases

For further guidance, see Contracts of Employment and Constructive Dismissal.

Can Your Employer Make You Redundant Because Business Has Declined?

Potentially.

Where the employer genuinely requires fewer employees to carry out particular work, redundancy may be appropriate.

The employer should still follow the applicable redundancy procedure.

This can include:

• Consultation
• Fair selection
• Consideration of alternatives
• Suitable alternative employment
• Appropriate notice
• Redundancy pay where eligible

For further information, see Redundancy.

Can Temporary Working Arrangements Be Agreed Instead of Redundancy?

Yes.

Employers and employees can sometimes agree temporary arrangements designed to avoid redundancies.

Possible options can include:

• Reduced hours
• Temporary part-time working
• Unpaid leave
• Voluntary salary reductions
• Job sharing
• Changes to duties
• Temporary redeployment
• Alternative working patterns

Any agreement should clearly record:

• What is changing
• How long the arrangement will last
• What pay applies
• When the arrangement will be reviewed
• Whether previous terms automatically return
• How the arrangement can be ended

Clear written terms can reduce the risk of later disagreement.

What if You Have an Old Dispute About Furlough?

Although the CJRS has ended, historical disputes may still occasionally arise concerning matters such as:

• Furlough agreements
• Pay
• Holiday pay
• Redundancy calculations
• Contractual terms
• HMRC claims
• Alleged misuse of the scheme

However, many employment claims relating to events in 2020 or 2021 are likely to face significant limitation issues by 2026.

Different legal claims have different deadlines, so professional advice should be obtained before assuming that a historical claim remains available.

When Should You Seek Professional Advice?

Advice may be useful where:

• Your employer is using the term "furlough" in 2026
• You are being asked to accept unpaid leave
• Your hours are being reduced
• Your salary is being reduced
• You have been temporarily laid off
• You are being placed on short-time working
• You are facing redundancy
• Your employer is relying on a lay-off clause
• You believe your pay has been unlawfully deducted
• You are considering resigning
• You have a historical dispute relating to the CJRS

The Coronavirus furlough scheme itself is no longer available, so any current proposal to reduce work or pay should be considered under the ordinary rules of employment contracts, lay-off, short-time working and redundancy.