Coronavirus Job Retention Scheme did not create statutory rights for employees (Mones v Lisa Franklin Ltd)

The government’s Coronavirus Job Retention Scheme, introduced during the coronavirus (COVID-19) pandemic, created rights and obligations between HMRC and employers and did not create any statutory rights for employees, according to the Employment Appeal Tribunal (EAT).

What are the practical implications of this judgment?

This judgment is of interest as one of the first appellate decisions on the workings of the Coronavirus Job Retention Scheme (CJRS). It makes clear that the CJRS created rights and obligations between HMRC and employers and did not create any statutory employment law rights for employees.

In this case, the EAT upheld the tribunal’s finding that the parties had consensually varied the claimant’s contract of employment to provide the formula by reference to which her furlough pay would be calculated and the CJRS had no role to play. However, the EAT emphasised that things might be different on a different set of facts. The EAT pointed out that in the absence of an agreed contractual variation and where an employer had chosen to furlough staff and claim reimbursement from HMRC under the CJRS, it might well be that an employee’s contention for an implied term that their furlough pay would be calculated in accordance with the formula set out in the CJRS would have force. That would not be because the CJRS itself conferred a statutory or contractual right upon the employee but because, in default of the parties’ agreement to an alternative sum or methodology, a court or tribunal might accept that there had been a mutual intention to adopt the formula set out in the CJRS, as revised from time to time. Parties should note that that would be a fact-sensitive question and was not this case.

Case details

• Court: Employment Appeal Tribunal
• Judge: Mrs Justice Ellenbogen
• Date of judgment: 28 April 2023

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