Introduction to this document

Letter seeking agreement to full furlough

The Coronavirus Job Retention Scheme (CJRS) has been extended until 30 September 2021 and it still enables you to fully furlough employees during the ongoing coronavirus pandemic, provided they don’t do any work for you. Our letter guides you through seeking employee consent to a full furlough arrangement.

Consent

The CJRS is to remain open until 30 September 2021 and it still enables employees to be fully or flexibly furloughed. Where you have no work for them to do, e.g. because your business premises have been legally required to close, you will need to consider full furlough. Under the rules, you need to agree with your employees any full furlough arrangement and confirm that agreement in writing. In addition, placing an employee on full furlough at less than 100% of their pay requires either a term in their employment contract permitting this or their express consent. Without this, you risk a breach of contract, unlawful deductions from wages and/or constructive dismissal claim. So, our Letter Seeking Agreement to Full Furlough is intended to obtain the employee’s consent in writing, both to the proposed full furlough and to the maximum amount of wages you’ll be paying during it. Keep a record of your communication for five years. Note also that if 20 or more staff are involved, you’ll additionally need to comply with collective consultation obligations, if your other option to non-consent is going to be staff redundancy. If you do have some work for employees to do, but not for their full usual hours, you can seek their agreement to a flexible furlough arrangement (see our Letter Seeking Agreement to Flexible Furlough). For periods from 1 May 2021 onwards, employees must have been on your PAYE payroll on 2 March 2021 to be eligible for the extended CJRS, but they don’t need to have been furloughed previously, and neither do you need to have previously used the CJRS.

Pay position

Employees receive 80% of their usual pay, up to a cap of £2,500 per month, and until 30 June 2021 this was funded by the government by way of CJRS grant. You only needed to cover employers’ NI and employer pension contributions.

For periods in July 2021, CJRS grants cover 70% of employees’ usual pay for furloughed hours, up to a cap of £2,187.50. In August and September 2021, this is then reduced to 60% of employees’ usual pay, up to a cap of £1,875. You need to continue to pay your fully furloughed employees 80% of their usual pay during this time, up to the £2,500 monthly cap. This means that, for periods between July and September 2021, you need to fund the difference between this and the CJRS grants yourself.

Letter contents

Our letter sets out how long you expect full furlough to last and in what circumstances it would end, what the employee would be paid during it (essentially 80% of their usual pay, subject to the cap), and confirmation that the employee can’t currently work, even from home, during full furlough. It then asks the employee to sign and date the attached acceptance slip to confirm they’re willing to accept the full furlough arrangement you’ve proposed. While an employee is on furlough, their employment contract continues and they retain their statutory and contractual employment rights, e.g. they’ll continue to accrue annual leave and you must maintain their contractual benefits, such as private medical insurance, unless agreed otherwise.