Does an employer need to obtain an employee’s written agreement to be furloughed?

According to the HM Treasury Direction on the Coronavirus Job Retention Scheme, which was published on 15 April 2020, to be eligible to make a claim under the scheme for an employee’s wage costs, the employer must obtain the employee’s written agreement to be furloughed. The Direction states that the employer and employee must agree in writing “that the employee will cease all work in relation to their employment”.

The requirement to obtain the employee’s written agreement to cease work is not included in guidance on the Coronavirus Job Retention Scheme published by HM Revenue and Customs (HMRC), which until publication of the Treasury Direction, was the key source of information from the Government on the operation of the scheme. The HMRC guidance (last updated on 15 April 2020) requires employers only to confirm in writing to the employee that they have been furloughed. Therefore, employers may have furloughed employees without first obtaining their written agreement.

Clarification from the Government is awaited on this point. In the meantime, employers that do not already have the required written agreement could contact their furloughed employees to obtain their agreement in writing not to do any work in relation to their employment while they are furloughed. This agreement can be obtained by email.

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