New national lockdown – Impact on CJRS for employers and employees

6th January 2021

On 4th January the Prime Minister announced that a new national lockdown would come into force from midnight 5th January as a result of the continuing coronavirus pandemic. The lockdown measures are similar to those imposed in March 2020; the public are now not permitted to leave their home or be outside their home without ‘reasonable excuse’ and this will be enshrined in law.  Fixed penalty fines can be issued in the case of breach.

The new lockdown rules are therefore likely to have a significant impact on employers and employees. In particular, the exact wording in the government guidance as to working from home has been changed and now states that “everyone who can work from home must do so (our emphasis)”. A ‘reasonable excuse’ encompasses people leaving their home for work purposes where it is unreasonable for them to do their job from home, “including but not limited to people who work within critical national infrastructure, construction or manufacturing that require in-person attendance”.

The new lockdown measures are expected to stay in place until at least the middle of February when the rules will be reviewed.

Has the furlough scheme been changed because of the lockdown?

No, at the time of writing the current Coronavirus Job Retention Scheme (the CJRS) remains unchanged and is due to end on 30 April 2021 as announced on 17th December.

There is more information about particular CJRS rules such as how employers can use the scheme whilst going through a redundancy or other termination process, and other essential tips for navigating the CJRS in our previous articles

How much can employers expect to claim during the new lockdown? 

The new rules mean that businesses may well need to furlough (more of) their employees and so will need to (and be able to) make claims in respect of such employees under the CJRS.

The CJRS rules remain the same meaning that government contributions will remain at 80% of the furloughed employee’s salary until the end of April 2021 when the furlough scheme is currently planned to come to an end.

This means that employers will receive a grant for up to 80% of their employees’ current salary when placed on furlough for hours not worked up to a capped amount of £2,500 per month.

The CJRS remains open to all employers with a UK bank account and UK PAYE scheme, small or large, charitable or non-profit, and the scheme rules remain the same as announced in December 2020.

What about employees who are shielding?

Those who are clinically extremely vulnerable have been advised that they should only go out for medical appointments, exercise or if it is essential and should not attend work.

Newly shielding employees should receive written confirmation from their local NHS Trust in the same way as shielding employees did previously. It is not clear from the guidance whether employees who previously shielded will receive another letter from their local Trust but it seems unlikely.

Employees who are unable to work because they are clinically extremely vulnerable, shielding, or at the highest risk of severe illness from coronavirus and following public health guidance are eligible for the CJRS.

Can employers furlough those employees who are unable to work because of childcare or caring responsibilities?

As a result of school closures many employees may be unable to work from home or their normal workplace during the new lockdown due to caring responsibilities.

Employers are able to offer an employee a period of furlough if the employee is unable to work because they have caring responsibilities resulting from Covid-19, including employees that need to look after children required to access schooling through remote learning. An employer does not need to be facing a wider reduction in demand or be closed to be eligible to claim under the CJRS for these employees. As previously, best practice means that any period of furlough should be agreed with the employee and evidenced in writing.

Under the new rules parents are able to form a childcare bubble (subject to certain eligibility criteria). This allows friends or family from one other household to provide informal childcare and may mean that parents with childcare responsibilities could work part time or flexibly. Flexible furlough is still permitted under the CJRS and so employers may be able to use the CJRS on a flexible basis: paying employees when they can work and claiming under the CJRS when they can’t.

Can employers claim for employees who are sick or self-isolating?

Furloughed employees who become ill must be paid at least Statutory Sick Pay (SSP). As under the CJRS previously, it is up to employers to decide whether to move furloughed employees onto SSP or to keep them on furlough, at their furloughed rate.

Clients should note that, as set out in the current CJRS guidance on employee eligibility for the scheme, the scheme is not intended for short term absences from work due to illnesses or self-isolation.

What other financial support is available?

The Chancellor announced today that businesses in the retail, hospitality and leisure sector are eligible for a one-off top up grant worth up to £9,000 per property which is intended to help businesses through to the Spring.

In addition the Chancellor announced that a further £594 million is being made available for Local Authorities and the Devolved Administrations to support other businesses not eligible for the above grants, that might be affected by the restrictions. Businesses will be able to apply to their Local Authorities for such funding.

These new funding opportunities come in addition to the current loan schemes including the Bounce Back Loan Scheme, Coronavirus Business Interruption Loan Scheme, and the Coronavirus Large Business Interruption Loan Scheme, which are due to come to an end on 31 March 2021.

Where can I find further advice and support?

Should you require any assistance with your employment arrangements during the Covid-19 pandemic, please do not hesitate to contact the co-head partners of our employment department.  Ewan Keen can be reached at 020 3206 2724 or  or Tamara Ludlow can be reached at 020 3206 2739 or