Update regarding Coronavirus Job Retention Scheme

On 15 April the Government issued its fourth guidance update on its Coronavirus Job Retention Scheme (CJRS).

https://www.gov.uk/guidance/claim-for-wage-costs-through-the-coronavirus-job-retention-scheme

On the same day, the Treasury also issued a Direction to HMRC giving authority and instructions to HMRC for making payment under the CJRS. In the words of the Government announcement which accompanied it, the Direction “sets out the legal framework for the [Cornonavirus Job Retention] Scheme”. The Direction will therefore take precedence over all guidance by the Government on the CJRS issued on or prior to 15 April.

CJRS Direction

One key provision within the Direction is the requirement at paragraph 6.7 which states

“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.” (our emphasis in bold).

The requirement for the employer and employee to agree in writing is significant as it is at odds with the Government’s previous guidance (which indicated that the only matter required to be in writing is the employer’s confirmation that the employee has been furloughed) and many companies may have furloughed employees with oral agreement or by relying on existing contractual terms.

Written agreement is commonly in the form of a duplicate letter from the employer signed and returned by the employee although paragraph 6.7 states the agreement in writing “may be in an electronic form such as email”.

If you intend to rely on the CJRS although have not agreed in writing with your employees that they will cease work, you should do this now in accordance with the Direction. If you require assistance with this or any other aspect of Furlough Leave, please do not hesitate to contact the Rollits’ Employment Team.

Posted on: 16/04/2020

This article is for general guidance only. It provides useful information in a concise form. Action should not be taken without obtaining specific legal advice.

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