- The Coronavirus Job Retention Scheme: Getting an employee’s agreement not to work in writing
The Coronavirus Job Retention Scheme: Getting an employee’s agreement not to work in writing
The Coronavirus Job Retention Scheme: Getting an employee’s agreement not to work in writing17th April 2020 - Published by Kuits employment team
On 15 April 2020, the Treasury issued a direction to HMRC relating to the Coronavirus Job Retention Scheme. The direction is important because it carries greater legal effect than the government guidance that has been updated over the last few weeks.
The previous versions of the government guidance made clear that an employer was merely required to write to the employee notifying that they had been furloughed. The employer is required to keep a copy of the notification for five years.
The Treasury’s direction, which supersedes the government guidance, now provides that HMRC will only recognise furlough as valid if:
“The 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 electronic form such as an email) that the employee will cease all work in relation to their employment”.
This means that deemed acceptance to a furlough agreement, which includes the instruction to cease work, may not be legally binding. Importantly, the employer may therefore not be able to recover monies from HMRC in relation to the Scheme.
HMRC will therefore require written evidence that the employer and the employee have agreed in writing that the employee will cease all work. This will include a signed furlough agreement or a reply by email. Agreement cannot be inferred or deemed from conduct.
Employers should check that all of their ‘furloughed’ staff have expressly agreed to the furlough agreement and that this can be evidenced.
Whilst the majority of employees would have provided explicit consent to the furlough agreement, we urge employers to follow up with those employees that have not in order to secure their written agreement not to work during the period of furlough.
We anticipate that the above point will be challenged but for the time being we highly recommend that employers take action. There is a risk that employers will not be able to recover monies from HMRC for any period spent by an employee on furlough before the employee’s acceptance was received by the employee.
To speak to an experienced advisor confidentially about furlough or any other employment issues, please call our employment team on 0161 838 7851 or contact them online HERE.
Kuits will be hosting a webinar to help employers navigate their way through this tricky time, providing up-to-date information on furloughed employees and how to plan a redundancy programme without falling foul of the law. You can register for free HERE.