Flexible Furlough Scheme - Changes to the Coronavirus Job Retention Scheme from 1 July 2020

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15 June, 2020

Emma Swan
Partner and Head of Commercial Employment

Key points to note

  • FFS can be implemented from 1 July 2020.
  • 31 July is the last date that claims can be submitted for June 2020 - unless employees are returning from a period of statutory leave such as maternity, paternity etc.
  • A single claim is capped by the maximum number of employees claimed for up to 30 June 2020.
  • Changes only apply to employees who have been furloughed for at least three weeks.
  • FFS must be for at least seven calendar days from 1 July 2020.

What is the FFS and how does it work?

From 1 July 2020, the FFS will allow employers to bring back employees steadily, on varied working patterns and/or reduced hours. If an employer utilises the FFS, it will be required to pay its employees in full (100%) for the hours that are worked but it will be able to recover wages for the hours the employee does not work, which they would usually have worked from the Scheme.

To calculate the number of furloughed hours, employers must first identify the employees "usual hours" as outlined below, which will be easier in some cases than others. Then employers must subtract the number of hours actually worked within the claim period to identify the number of hours furloughed for the purposes of the Scheme.

While employers may claim the grant in advance of the hours worked, we would suggest avoiding this to ensure that the hours are claimed correctly and to avoid overpayment and/or underpayment of the grant, which will need to be paid back to HMRC.

Employers must enter into a new written agreement with the employees (in some cases following collective agreement with trade unions), outlining the agreed flexible working arrangement. Clear written records must be kept of all hours worked and all hours to be claimed through the Scheme. These records should be kept for at least five years.

Employees can enter into a flexible furlough agreement more than once, which suggests that every time the working hours/pattern is changed, this should be reflected in a written agreement and the pattern can change provided it lasts for at least seven calendar days each time.

During the furloughed hours, the same rules apply as in the original CJRS and employees cannot undertake any work for you and/or provide any services to you.

Calculating Payments

There is an online calculator to assist employers to work out the calculations for each pay period, including FFS arrangements - this can be found using the following link https://www.tax.service.gov.uk/job-retention-scheme-calculator.

However, please see a breakdown of the steps below:

Working out usual hours for employees who are contracted for a fixed number of hours:

  • Check the latest contract of employment that applied to see what hours were agreed as at 19 March 2020 (beware of the argument for increased hours by virtue of custom and practice).
  • Divide this by number of calendar days in the repeating work pattern, including non-working days.
  • Multiply by number of calendar days in the pay period (or partial pay period) you are claiming for.
  • Round up to the next whole number.

If an employee was on annual leave, statutory leave or off sick at any time before 19 March 2020, the usual hours should be calculated as if that leave had not been taken.

Working out usual hours for employees who have variable hours:

Based on average hours worked in tax year 2019/2020

  • Start with the higher of either the average number of hours worked in the tax year 2019/2020.
  • Divide by the calendar days they were employed during the tax year 2019/2020, up to the day before they were furloughed, or the end of the tax year if earlier.
  • Multiply by the number of calendar days in the pay period (or partial period) you are claiming for.
  • Round up to the next whole number.

You should include any of leave for which the employee was paid at their full contracted rate (i.e. annual leave) and any overtime where pay was not discretionary.

Based on corresponding calendar period in tax year 2019/2020:

  • Identify pay periods in 2019/2020 that correspond to at least one calendar day in the pay period (or partial pay period) you are claiming for.
  • If the pay period (or partial pay period) are the exact same dates then use the number of hours worked. If not, add together the a proportion of the hours worked in each of the pay periods identified.

Working out usual hours for piece work:

Use the calculations above if possible and if not, calculate an estimate based on the number of pieces and the average rate of work per hour.

Further guidance on working our "usual" hours can be found at https://www.gov.uk/guidance/claim-for-wages-through-the-coronavirus-job-retention-scheme.


While the introduction of FFS arrangements may assist employers to re-open their businesses with a reduced workforce, if redundancies are envisaged, employers must be mindful of the gradual increased contributions associated with the Scheme and consider whether these costs can be sustained by the business. If not, employers may need to begin consultation sooner rather than later (bearing in mind collective consultation requirements and time scales which still apply).

Employers should also be mindful that discrimination laws continue to apply and employees should not be treated less favourably because of a protected characteristic, when making the decisions about who should and shouldn't return to work.

It is essential that clear records are kept in respect of FFS arrangements and the guidance indicates that each time the arrangement is changed, this will need to be reflected in a written agreement. While the guidance suggests that employees do not have to respond to confirmation of the arrangements, we would advise that each agreement is signed by both the employer and employee to reflect that an agreement was reached.

If you have any queries arising as a result of this briefing, or require any advice on the Scheme changes, please do not hesitate to get in touch.

For more information contact Emma Swan in our Employment & HR department via email or phone on 01254 222354. Alternatively send any question through to Forbes Solicitors via our online Contact Form.

Learn more about our Employment & HR department here

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