The Chancellor of the Exchequer has amended the Treasury Direction which provides the legal basis for the Coronavirus Job Retention Scheme. Amongst other changes, the amendments provide clarity about whether employers can furlough employees entitled to sick pay, which includes employees who have been asked to shield.

While the Government’s guidance notes said it was possible to furlough employees who were entitled to sick pay, the wording of the Treasury Direction had been much more ambiguous. It suggested that employers would not be able to claim under the Scheme for any employee who was entitled to claim sick pay – whether or not they were actually claiming sick pay.

The provision has now been changed to make it clear that employers can agree with their employees to take them off sick pay and put them on furlough instead.

Jo Davis, employment law partner at B P Collins LLP said:

“This is a welcome change to the Treasury Direction, which brings it in line with the Government’s own guidance notes. The previous ambiguity meant cautious employers were telling employees who had been advised to shield – and so were entitled to sick pay – that they couldn’t put them on furlough. This meant that shielding employees were losing out on furlough pay and employers felt that they weren’t able to do the right thing.”

For further information or advice on furlough please contact Jo Davis from our employment team on 01753 889995 or email

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