The Treasury Direction issued on 15 April which gives formal legal effect to the CJRS provides that an employee is ‘furloughed’ if, among other things, the ‘employee has been instructed by the employer to cease all work in relation to their employment’. The Direction qualifies this requirement as follows, suggesting that agreement of the employee must be sought and that employers cannot unilaterally furlough employees without their consent:
‘An employee has been instructed by the employer to cease all work in relation to their employment only 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.’
The position was further clarified in a communication from HMRC in response to a question raised by employment law barrister Daniel Barnett. The response notes that HMRC ‘will act at all times in accordance with the Direction’ and that ‘HMRC’s interpretation of the Direction is set out in our published guidance’. The letter continues, ‘put simply, the employer and the employee must reach an agreement and an auditable written record of this agreement must be retained. It does not necessarily follow that the employee will have provided written confirmation that such as agreement was reached in all cases.’
HMRC’s guidance Check if you can claim for your employees' wages through the coronavirus job retention scheme has again been updated and provides that employers must confirm the decision to furlough in writing to their employees and that, ‘if this is done in a way that is consistent with employment law, that consent is valid for the purposes of claiming through the scheme’.
The guidance also confirms that a collective agreement reached between an employer and a trade union to furlough staff is acceptable for the purpose establishing written agreement, so long as there is a written record which is retained for five years. In such cases, the guidance notes that individual employees do not need to provide a written response.
The updated guidance also covers employees on fixed-term contracts. Such individuals can be re-employed and furloughed if either their contract expired after 28 February 2020 and an RTI payment submission was notified to HMRC on or before that date, or their contract expired after 19 March 2020 and an RTI payment submission was notified to HMRC on or before that date.
The Treasury Direction issued on 15 April which gives formal legal effect to the CJRS provides that an employee is ‘furloughed’ if, among other things, the ‘employee has been instructed by the employer to cease all work in relation to their employment’. The Direction qualifies this requirement as follows, suggesting that agreement of the employee must be sought and that employers cannot unilaterally furlough employees without their consent:
‘An employee has been instructed by the employer to cease all work in relation to their employment only 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.’
The position was further clarified in a communication from HMRC in response to a question raised by employment law barrister Daniel Barnett. The response notes that HMRC ‘will act at all times in accordance with the Direction’ and that ‘HMRC’s interpretation of the Direction is set out in our published guidance’. The letter continues, ‘put simply, the employer and the employee must reach an agreement and an auditable written record of this agreement must be retained. It does not necessarily follow that the employee will have provided written confirmation that such as agreement was reached in all cases.’
HMRC’s guidance Check if you can claim for your employees' wages through the coronavirus job retention scheme has again been updated and provides that employers must confirm the decision to furlough in writing to their employees and that, ‘if this is done in a way that is consistent with employment law, that consent is valid for the purposes of claiming through the scheme’.
The guidance also confirms that a collective agreement reached between an employer and a trade union to furlough staff is acceptable for the purpose establishing written agreement, so long as there is a written record which is retained for five years. In such cases, the guidance notes that individual employees do not need to provide a written response.
The updated guidance also covers employees on fixed-term contracts. Such individuals can be re-employed and furloughed if either their contract expired after 28 February 2020 and an RTI payment submission was notified to HMRC on or before that date, or their contract expired after 19 March 2020 and an RTI payment submission was notified to HMRC on or before that date.
