Furlough Leave Updates
On Thursday 16th April the Treasury published a Direction to HMRC relating to the Coronavirus Job Retention Scheme. Prior to the Direction, government guidance suggested that employers merely needed to write to their employees to notify them that they have been furloughed. In further guidance published, this was reiterated. However, the Direction states, ‘if the employer and employee have agreed in writing (which may be in an electronic form such as an email) that the employee will cease all work in relation to their employment’. This suggests that the conduct of the parties is not going to be sufficient, there is a requirement for an agreement to be in writing and looking at the wording this suggests that the agreement in writing happens before the furlough period.
For many employers that furloughed employees before the Direction was published, they will need to contact their furloughed employees again and seek written agreement, if they did not do so originally. Particularly, if an employer agreed to pay full salary, they may not have foreseen the need to ‘agree’ with staff and they may need to revisit their procedure and put in place the appropriate agreement.
Dragon Argent are ready to help with any questions you may have, and to provide advice on how this affects your business.
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