Briefing Note – The Coronavirus Job Retention Scheme and Research: further update, 18 June 2020

Updated 18 June 2020

Sapna Marwaha, Sole Legal Counsel at Versus Arthritis and one of ARMA’s Directors, answers your questions on the Government’s Furloughing Scheme…

ARMA has received questions from members at both an operational and leadership level about the Coronavirus Job Retention Scheme (‘CJRS’) and what it means for research and research management staff.  We have worked closely with members, sister associations and other stakeholders to get an understanding of the landscape.  The mixed corporate status and financial complexity of universities has led to uncertainty.  The higher education sector has not been well placed to take advantage of the scheme as swiftly as others.  This was confirmed in the discussions at our recent Directors’ Roundtable event.  The scheme started on 1^st March and remains open until the 31 October 2020, following the extension announcement by the Chancellor on 12^th May.  The way in which the scheme operates will change in July.  On 29^th May, the government released further details on how the scheme will operate for the remaining months, including the introduction of employer contributions and flexible furloughing options.  New guidance was issued on 12^th June to support the changes that had been announced. 

I have prepared this briefing note to bring together key questions, key resources, and a summary of relevant information available to date.  The supplementary guidance for research organisations has also noted that institutions should expect guidance on the notification scheme for staff funded under public grants is expected to be released soon. 

Where can I find the information I need?

Official Guidance

• Guidance for employers
• Guidance for employees
• New guidance on changes to scheme
• Additional guidance for education providers
• How to claim – guide for employers
• Supplementary guidance for research organisations

Other Useful Resources

• Equality and Human Rights Commission – Guidance for employers
• AMRC – Medical research charities and COVID-19: AMRC’s response and guidance
• ACAS Advice for employers and employees
• UCU guidance
• UKRI coronavirus hub
• BUFDG coronavirus resources
• Safely back to work announcement
• Staying alert and safe social distancing
• Working safely during coronavirus – labs and research facilities
• HMRC Factsheet
• ARMA Directors Roundtable on Furloughing – Key points
• ARMA Directors Roundtable on Lockdown Exit Strategies and Restarting Research – Key Points

Research organisations have also published guidance and information for their staff on their websites and individuals should consult the guidance provided by their own internal experts.

Key Dates

1st March	CJRS opens
10th June	Date by which new entrants would need to have been furloughed in order to have completed mandatory 3 weeks in first phase
30th June	CJRS closes to new entrants *Note exception for staff returning from statutory parental leave*
1st July	Second phase and flexible furlough begin
1st August	Employers become responsible for employer national insurance contributions and pension
1st September	Employers become responsible for 10% of minimum wages due under the scheme plus employer national insurance contributions and pension
1st October	Employers become responsible for 20% of minimum wages due under the scheme plus employer national insurance contributions and pension
31st October	CJRS ends

Key Changes

The table below outlines how contributions will work throughout the rest of the scheme, not including any discretionary top ups above the 80%.

	1st July	1st August	1st September	1st October
Government contribution: employer national insurance contributions and pension contributions	Yes	No	No	No
Government contribution: wages	80% up to £2,500	80% up to £2,500	70% up to £2,187.50	60% up to £1,875
Employer contribution: employer national insurance contributions and pension contributions	No	Yes	Yes	Yes
Employer contribution: wages	–	–	10% up to £312.50	Min 20% up to £625
Employee receives	80% up to £2,500 per month	80% up to £2,500 per month	80% up to £2,500 per month	80% up to £2,500 per month

Questions from employees

Am I eligible to be furloughed?

Following the passing of the 10^th June deadline, an individual can now only be furloughed if they had already been furloughed by that deadline and for a full three weeks.  On 9^th June, the government announced a key exception to this rule for individuals who have been on statutory parental leave, including maternity, paternity, adoption and child bereavement leave.  Individuals returning from family leave may still be able to utilise the scheme.  There are some other exceptions such as where an individual’s employer changes due to TUPE or a company entering administration, their new employer may continue to furlough them provided they had met all the conditions with the original employer.

Both the employee and the employer must agree to the furlough and meet the separate criteria that apply.  If an employee is concerned about their ability to carry out their role because of the impact that the pandemic is having, they should discuss it with their employer. 

The scheme is designed to protect employees who may have been impacted in a variety of ways. 

This includes employees who are affected because:

they require to shield due to being in a highly vulnerable category and are unable to effectively perform their role from home;

they have temporary caring responsibilities that are incompatible with performing their role;

there has been a temporary downturn, pause or suspension in activity as a result of the pandemic; or

they are unable to effectively perform their role off-site.

The scheme is open to employees:

regardless of their employment contract type (including part-time, full-time, zero hours, fixed term, permanent, apprentice or director);

on ‘all categories of visa’;

provided they were registered on the employer’s PAYE payroll on or before 19 March 2020 and potentially even if they have had an employment transfer after this date; and

even if they have already been made redundant as a result of the pandemic on or after 28 February 2020 in which case the employer may be able to re-engage and furlough.

The supplementary guidance for research organisations includes explicit guidance on fixed term contracts.  It states that “institutions could claim support for those research staff on fixed term contracts due to expire during the period of coronavirus disruption, where that research is unable to continue and the funder has offered a no-cost extension” and “if furloughed, the institution could extend the researcher’s contract until work on their grant can be completed”.

In order to be eligible for the scheme from 1^st July onwards, an employee must have been furloughed for a full minimum 3 week cycle prior to 30^th June 2020, when the scheme will close to new entrants i.e. they must have been furloughed for the first time on or before 10^th June 2020.

Full details of the criteria are in the official guidance for employees.

What can I do while on furlough?

Employees can undertake training and development.  Employees can also volunteer for other organisations with the consent of their employer.  If an employee is a staff representative, whether through a union or otherwise, they can continue with their responsibilities.  They are not and cannot be required to do these things.  There are likely to be examples, such as where a furlough decision has been reached because employees are required to care for dependents, where it would be inappropriate or unworkable to do so.

The scheme encourages employers to offer and employees to undertake training and development activities.  If an employee is looking for opportunities to use their skills and expertise or gain some new ones, ARMA and other sister associations across the sector have worked industriously to enhance their online offerings. Organisations such as AMRC and furlonteer have begun to advertise volunteer opportunities for individuals on furlough.  Organisations such as Reach Volunteering have also reported an increase in sign ups from professionals looking to volunteer their skills during the pandemic.  We are also aware of some members who have used their time in lockdown to Be Part of Research.

Employees cannot undertake work or volunteer for their employer in any way that provides services or generates revenue.  To do so would be a breach of the rules and would put any furlough grant payments at risk.  There has been pressure for the government to relax the rules around this for charitable organisations to enable staff unable to do their own roles to support the response effort.  This included a recent Department of Culture, Media and Sport Committee report which recommended an exemption from this rule for charitable organisations. It has been resisted so far due to concerns that it would open the scheme up to a higher risk of abuse.

Full details of the rules are in the official guidance for employees.

What will I be eligible to receive while on furlough?

Employees will receive a minimum of 80% of their wage up to £2,500 per month.  This minimum amount does not change at any point during the scheme.  The contribution that employers must make does change and any discretionary uplift may also change.  Until the end of July, the grant will cover the full 80% and additional employer costs such as mandatory pension contributions and national insurance but it will still be subject to the usual tax and deductions from an employee perspective.  From August, employers will need to cover pension and contributions and national insurance themselves.  From September they will also have to cover a minimum of 10% of the employees’ wage and in October, this will rise to 20%.  In all circumstances, the amount received by the employee does not change.  Employers may choose to top up the salary up to 100% and continue to pay additional benefits such as enhanced pension contributions.  This would be discretionary and will vary between employers.  Employers may also choose to vary their policy at the different stages of the scheme.  Employees should consult their employer’s internal guidance to find out the policy at their research organisation and discuss with their employer to understand the implications before reaching an agreement on furlough.

Full details of the grant are in the official guidance for employees.

How long can I be furloughed for?

The CJRS is due to expire at the end of October.  Employees could have been furloughed for up to 8 months from 1^st March to 31^st October.  Employees must have been furloughed for a minimum of three weeks in the first phase.  Only individuals who have been a part of the first phase of the scheme will be able to benefit from the subsequent phases.  The scheme will officially close to new entrants on 30^th June 2020.  This meant that the final date by which an employee could be furloughed for the first time was 10^th June 2020.  From 1^st July, only employees who have already been furloughed for at least 3 weeks in the first phase will be able to continue to be furloughed until up to 31^st October, unless they fall into one of the parental leave exceptions. 

Am I eligible for flexible furlough?

In order to be eligible for the scheme from 1^st July onwards, an employee must have been furloughed for a full minimum 3 week cycle prior to 30^th June 2020, when the scheme will close to new entrants i.e. they must have been furloughed for the first time by 10^th June 2020. Note the exception for individuals returning from statutory parental leave.

Full details of the criteria are in the official guidance for employees.

How does flexible furlough work?

From 1^st July, in agreement with their employers, employees who have previously been furloughed will be permitted to return to work for any amount of time and on any shift pattern.  In these instances, the employee will be paid on their standard terms and at full pay for all hours worked.  They will continue to be paid in line with the furloughed terms for any time that they remain furloughed.  As with the original furlough, flexible furlough terms must be reach by agreement between the employee and the employer and the terms should be recorded.

Are there any additional protections for employees during the pandemic?

The CJRS is designed to provide employees with additional protection from loss of employment at this time.  Employers must continue to comply with relevant legislation including equality and discrimination law and redundancy law in reaching decisions on employment matters.  This has been confirmed by the Equality and Human Rights Commission.

If an employee has any concerns, they should raise these with their employer in the first instance.  They can also seek advice through their union or ACAS.

Questions from employers

Is my organisation eligible to furlough staff?

The scheme is designed for organisations that “cannot maintain” their workforce in the current circumstances. The additional guidance for education providers explicitly states that “HE providers are eligible for the CJRS” and individual institutions should consider their eligibility for the scheme in terms of the specific criteria.  The main guidance states that public sector organisations are generally not expected to furlough staff as public sector staff should generally be performing essential public service functions.  It does acknowledge that, in certain cases, for example where organisations are not primarily funded by the government and staff cannot be redeployed to assist with the coronavirus response, the scheme may be appropriate for some staff.  This initially generated uncertainty with many universities assuming that they would not be eligible due to their status as public sector organisations and the public funding they receive.  The additional guidance has provided helpful clarification.This was followed by the supplementary guidance for research organisations published on 5^th June that provided further clarification.

For members in other types of organisation, the situation has generally been clearer.  For example, public sectors organisations have made clear statements that they will not be furloughing staff.  In contrast, some third sector organisations have been swift to access the scheme.  Of the 20 largest charities in the UK, only one has declined to use the scheme.  The income of charitable research funders has been significantly impacted and as a result “British Heart Foundation has furloughed 3,600, around 80% of its workforce. Cancer Research UK has furloughed around 2,400 staff, which equates to 60% of its workforce.”Some third sector organisations have faced the same uncertainty as universities as a result of their dependence on public grants.

How long do I have to access the scheme?

The scheme opened on 1^st March and will remain open until the end of October 2020.  The scheme will close to new entrants from 30^th June.  An employee must have been furloughed for a full three week period in the first phase of the scheme to be able to take part in further phases.  To claim, the latest point by which an employer can furlough an employee for the first time is 10^th June 2020.  It is an 8-month scheme in which employees could be furloughed for anywhere between 3 weeks and 8 months. 

What are other stakeholders saying?

Professor Sir Mark Walport confirmed in his open letter, that UKRI are “working across government, with our ‘parent’ Department of Business, Energy and Industrial Strategy and with the Treasury” on the questions being raised and answers being delivered across the sector.

In his more recent open letter of 1^st June, he stated that:

“In recent weeks the government has published details of a package of measures to support students and the higher education sector, including guidance on the use of the Coronavirus Job Retention Scheme (CJRS) in Higher Education Institutions. This recognises the complexity of funding and clarifies how institutions should be using the scheme. You can find the relevant guidance here. It’s worth noting that researchers who continue to be paid through UKRI grants-funded research cannot also be supported through the furlough scheme.”

Following the helpful clarification in the additional guidance, AMRC released a statement which said “Charities cannot support researcher salaries where that research has been paused – to allow existing research investment to bear fruit, we urge universities to use the CRJS until the paused projects can be started again”.  The responses of individual member organisations are available through their guidance page .

The statement was further updated on 15^th May to include the statement that:

“We urge universities not to attempt to make furloughing of researchers conditional on charity funders topping up the additional 20% of salaries not funded by the scheme. Many are unable to do this for their own employees and will not be able to adopt a different stance for researchers employed by the university.

We ask that UKRI provide specific guidance on the scheme giving explicit clarity, particularly in cases where charity-funded researchers have multiple funding sources and/or are funded by public-charity partnerships.”

Following the government announcement that the imminent support for the sector would take the form of an advance and any further financial support would be a matter for the new taskforce, the Shadow Universities Minister, Emma Hardy, published an open letter where she urged “universities to make full use of the furloughing scheme to prevent redundancies during this crisis”.

Minister for Science, Research and Innovation, Amanda Solloway, released a video statement following the first meeting of the research sustainability taskforce confirming that “providers will have access to the financial support schemes estimated to be worth as much as £700m to the sector”.

What are the extra things that research organisations might need to think about?

All users of the scheme must continue to comply with their obligations in respect of employment law, including equality and discrimination legislation and redundancy legislation.  For higher education providers, the additional guidance for education providers also sets out further considerations.

Higher education providers must first consider whether they meet the published criteria for the Coronavirus Business Interruption Loan Scheme (CBILS) or the Coronavirus Large Business Interruption Loan Scheme (CLBILS) and whether these would be more appropriate.  The guidance does not give any working examples of where the loan schemes would be more appropriate but there is clear guidance on circumstances where the CJRS would not be available.  For example, where the grant would be duplicative of other public grants and the funding provided would generate financial reserves for the organisation. It can be inferred that where financial support is being sought as a result of income being deferred rather than lost, lending would be the more appropriate solution.  The recent announcement that the government will be advancing certain payments due to higher education providers may relieve immediate cash flow concerns for some.

The additional guidance states:

“HE providers should only furlough employees and seek support through the Coronavirus Job Retention Scheme if they meet the following conditions:

the employee works in an area of business where services are temporarily not required and whose salary is not covered by public funding;

the employee would otherwise be made redundant or laid off;

the employee is not involved in delivering provision that has already been funded;

(where appropriate) the employee is not required to deliver provision for a child of a critical worker and/or vulnerable child;

the grant from the Coronavirus Job Retention Scheme would not be duplicative to other public grants that the HE provider receives and would not lead to financial reserves being created.”

The additional guidance for education providers emphasises that it is “likely that decisions on whether to furlough staff will need to be taken on a case by case basis”.  Organisations must look at the individual circumstances of each case to determine whether the criteria for both the individual and the organisation are met.

The supplementary guidance for research organisations states that “when research staff who are directly supported by a public grant are furloughed, institutions should notify the research funder.”  The guidance states that further details of the notification process are due to be released shortly.  The guidance suggests that this is intended to support monitoring arrangements by the government to mitigate against the risk of double funding and organisations should keep appropriate records.

How are research organisations determining which employees work in an area of business where services are temporarily not required and whose salary is not covered by public funding?

The current circumstances have significantly impacted the ability to deliver research and this has a direct effect on the need for research management support.  Many clinical trials have been suspended in order to allow clinical staff to focus on the response effort.  Other research studies have been impacted by the lack of access to campus.  Research management staff have also faced changes such as the moving REF deadline.  Organisations are having to reprioritise and while some teams are seeing a significant upturn in activities, other activities have been deprioritised.  Each organisation is having to evaluate its revised needs based on their own portfolio and needs.

The reference to ‘salary not covered by public funding’ may initially seem prohibitive but the guidance goes on to provide further useful clarification:

“We recognise the complexity of HE revenue and the role that cross-subsidy plays. If it is difficult to distinguish whether staff are funded through public or commercial income for the purposes of meeting the first 3 conditions as listed above, and some staff will be funded through multiple sources, as a guiding principle, HE providers should not seek to furlough a higher proportion of their wage bill than could reasonably be considered to have been generated through commercial income, including from non-public research grants and contracts.”

The supplementary guidance for research organisations further states:

“where research work has reduced (for example, where grant holders have requested a no-cost extension to UKRI grants) and therefore institutions have seen a reduction in payments towards staff costs for that period, resulting in a loss of income due to ceased or reduced delivery of research programmes, institutions could access CJRS for research staff providing that they meet the other criteria set by HMRC and, if they are a higher education provider, DfE’s guidance on CJRS access; however those staff costs for that furlough period may not be claimed from the public research funder”

It also clarifies that:

“we recognise that research is often funded from a mixture of public and private income streams and that it may be difficult to distinguish between which stream of income directly support research and technical staff. Those staff who are supported by a mixture of commercial contracts, EU and UKRI grants – whose work has been paused are also eligible for CJRS support”

From this, it can be inferred that for staff who are centrally funded can be determined as being funded through a mixed funding source and the institution may furlough a proportion of centrally funded staff that is up to or equal to the proportion of funding that they receive from non-public sources.

How are research organisations determining which employees would otherwise be made redundant or laid off?

Within affected teams, there are individuals who find themselves in the situation where the organisation is facing a temporary inability to keep the employee gainfully occupied or where their personal circumstances have created a temporary inability to deliver on their role.  In other circumstances, informing an employer that an employee does not have enough work or is prevented from completing the work that they are being paid to deliver would generally lead to consideration of redeployment, redundancy or termination. There is an obligation to first consider whether redeployment would be appropriate.  Please note that employees who are unwell should be dealt with through the normal sick leave policy, though the scheme does offer some flexibility around long term sickness.  Employees who are unable to perform their roles due to a need to shield, care for dependents or because they are currently unable to access the resources needed to perform their role may be eligible for the CJRS.

How are research organisations determining whether an employee is involved in delivering provision that has already been funded?

The example cited within the additional guidance for education providers is:

“Where research work has been paused (for example, where grant holders have requested a no-cost extension to UK Research & Innovation grants) and therefore providers are not able to receive payments towards staff costs for a period, resulting in a loss of income due to ceased or reduced delivery of research programmes, providers should consider their eligibility and apply for the wide range of financial support that HM Treasury has already announced for businesses, including the Coronavirus Job Retention Scheme in line with the above conditions.”

From this, it can be inferred that where an individual is funded through a grant (including a publicly funded grant) but the project or activity has been paused and no additional funding has been granted, the eligibility should be determined based on the funds that would be used to fill the shortfall (i.e. central funds) rather than the grant which is currently funding their activity.  If an individual is performing a grant funded role, the post will only be considered funded if the grant includes funding for the additional time that will be required to deliver the work, given the impact of the pandemic.

How are research organisations determining whether the grant from the Coronavirus Job Retention Scheme would be duplicative to other public grants that the HE provider receives and would lead to financial reserves being created?

The main guidance in reference to public sector organisations states that the furlough scheme is only available where “organisations are not primarily funded by the government and whose staff cannot be redeployed to assist with the coronavirus response”.  Many universities have redeployed clinical staff to assist with the coronavirus response, albeit to another part of the public sector.  Key funders such as Cancer Research UK and British Heart Foundation have referenced their expectation that salary costs for research staff that have been seconded to the NHS to perform clinical duties will be recoverable from the NHS.  Some members have also stated that they have received indications that this will be the case.  The official guidance has yet to address the issue directly and as such, appropriate caution should be employed.  If the assumptions are correct, this would be an example where a grant under CJRS could be duplicative of funds to be received and would result in financial reserves being created. 

What will the grant cover?

Until the end of July, the grant will cover 80% of furloughed UK employees’ gross monthly earnings, subject to a cap of £2,500 a month, plus the associated Employer National Insurance Contributions (NICs) and minimum automatic enrolment employer pension contributions on that wage, provided they keep the individual on payroll.  From August, employers will have to take responsibility for NI and pension contributions.  From September, they will also have to pay 10% of wage costs.  From October, this will increase to 20% of wage costs.  The grant will not cover more generous pension contributions above the mandatory employer contribution.    Further, the Apprenticeship Levy and Student Loans cannot be reclaimed.  The original advice stated that it would not cover the cost of any other benefits.  This has been updated to state that an employer may make certain deductions from an employee’s salary with the employee’s authorisation, provided that the deductions are not administration charges, fees or other costs in connection with the employment.

Full details of what is covered are in the guidance for employers.

Can claims be backdated?

Claims can be backdated to 1^st March, if applicable.  An employer can only claim from the date which the furlough was agreed and implemented.  An employer cannot backdate claims for employees who have been working in the interim period, even if on reduced hours or responsibilities. In approaching the process of furlough, it is important to prioritise determining who is eligible and willing to be furloughed in order to gain maximum benefit from the CJRS. It is now possible to start and save applications within the systems, allowing greater opportunity to gather the relevant data while going through the claim process.

Full details of the claims process can be found in the guidance for employers.

Can access to the furlough scheme continue as research facilities begin to reopen?

The most recent government staying alert and safe social distancing states “All workers who cannot work from home should travel to work if their workplace is open. Sectors of the economy that are allowed to be open should be open – such as food production, construction, manufacturing, logistics, distribution and scientific research. As soon as practicable, workplaces should be set up to meet the new COVID-19 secure guidelines”.  The relevant COVID-19 secure guidelines for research are set out in this guidance on labs and research facilities.  The guidance on offices may also be relevant, though it is expected that many office based roles will continue operating remotely. 

Many institutions are now considering what elements of their research facilities can be reopened to enable those who have been prevented from working to return to the lab and what steps will need to be taken to make research environments compliant.  The getting safely back to work announcement reminds employers of their existing obligations that continue to apply.  “This guidance operates within current health and safety employment and equalities legislation and employers will need to carry out COVID-19 risk assessments in consultation with their workers or trade unions, to establish what guidelines to put in place.” The reference to equalities legislation also suggests that equality impact assessments should be considered.  Employees should not be invited to return to facilities before environments and organisations are compliant. 

Many employees will not be able to return to work, even if their working environment is opened and made appropriately safe to access.  These include employees who are clinically vulnerable or have caring responsibilities.  The new arrangements are also likely to create inherent limitations given the need to ‘maintain 2 metres social distancing’ and ‘manage transmission risk’. It is unlikely that all employees will be able to return at once. 

In his commons speech, the PM made no suggestion that the parameters for accessing the scheme have changed.  As outlined above, even as research facilities consider reopening, there are likely to be circumstances where both the employer and employee meet the requisite criteria to access the scheme and they continue to be able to do so.  The PM explicitly acknowledged circumstances such as where an employee does not have access to childcare where furloughing remains an appropriate solution.

Can employees be furloughed on rotation?

It has been possible to furlough employees on rotation since the scheme’s inception.  The minimum length of time an employee can be furloughed for is 3 weeks. Furlough leave can be rotated and employees can be furloughed multiple times, provided each stint is at least 3 weeks. This can be an effective way to maintain contact and skills across teams, minimise risk by putting employees into smaller groups and to distribute the impact more fairly.  The getting safely back to work announcement makes explicit reference to ‘workplace shift patterns or fixed teams minimising the number of people in contact with one another’ as measures to minimise transmission risk.  Furloughing employees on rotation may be an effective way to achieve this.

Can employees be placed on flexible furlough?

Employees will now be able to return to work part-time from 1^st July.  Employers will be able to bring back employees who have previously been furloughed for any amount of time and on any shift pattern.  The terms of the arrangement must be agreed between the employer and employee and they must be recorded. 

Where the employer and employee agree to a new working pattern for a period, the employer must pay the employee on their standard terms and at full pay for all hours worked.  They may continue to pay employees in line with the furloughed terms for the time that they remain furloughed and to claim the corresponding grant for that time through the scheme. 

Note that the scheme now involves a cap on numbers.  You cannot place more staff on furlough than the maximum number that you claimed for in any month up to June.  Any staff returning from statutory parental leave who could not have been counted in previous months will not count towards the maximum cap. 

Further guidance on the changes to the scheme is available here.

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If you have further information in relation to any of the questions addressed above or further questions during this time, please email them to enquiries@arma.ac.uk.

This briefing note is provided for information only and does not constitute legal advice.  Any employers or employees considering making use of CJRS should consult closely with the professional advisors to the organisation including financial, legal and HR experts as well as the available guidance. The information contained in this document is correct as at 17th June 2020.  Further announcements on the CJRS are expected shortly and while we will seek to update the documentation as circumstances evolve, this may not be immediate and should not be regarded as a substitute for appropriate due diligence.