Q&As

Can a settlement agreement provided for an employee to be placed on furlough under the Coronavirus Job Retention Scheme (CRJS) for a period of three months or more, during which time their salary is funded by the grant and at the end of this period the employee is to be paid their contractual notice period and a Compensatory payment which includes a Redundancy payment? If this is not within the spirit of the Scheme is it an offence which is to be reported and consent to be obtained?

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Published on LexisPSL on 14/10/2020

The following Employment Q&A provides comprehensive and up to date legal information covering:

  • Can a settlement agreement provided for an employee to be placed on furlough under the Coronavirus Job Retention Scheme (CRJS) for a period of three months or more, during which time their salary is funded by the grant and at the end of this period the employee is to be paid their contractual notice period and a Compensatory payment which includes a Redundancy payment? If this is not within the spirit of the Scheme is it an offence which is to be reported and consent to be obtained?

Can a settlement agreement provided for an employee to be placed on furlough under the Coronavirus Job Retention Scheme (CRJS) for a period of three months or more, during which time their salary is funded by the grant and at the end of this period the employee is to be paid their contractual notice period and a Compensatory payment which includes a Redundancy payment? If this is not within the spirit of the Scheme is it an offence which is to be reported and consent to be obtained?

For information on the Coronavirus Job Retention Scheme (CJRS) generally, see Practice Notes: Coronavirus Job Retention Scheme (revised version 1 July to 31 October 2020) and Coronavirus Job Retention Scheme (original version to 30 June 2020).

The statutory basis of the CJRS is set out in a number of Treasury Directions.

Treasury Direction No 1 and Treasury Direction No 2 state that the purpose of CJRS is to provide for payments to be made to employers on a claim made in respect of them incurring costs of employment in respect of furloughed employees arising from the health, social and economic emergency in the UK resulting from coronavirus and coronavirus disease.

However, paragraph 2.2 of the Schedule to Treasury Direction No 3 (which applies equally to the original CJRS) also states that it is integral to the purpose of CJRS that

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