Introduction to this document

Letter seeking agreement to furlough

The government has put in place a scheme enabling you to obtain a grant to pay part of your employees’ wages if they’ve had to stop working during the coronavirus pandemic. Our letter guides you through seeking employee consent.

Eligibility

The Coronavirus Job Retention Scheme (CJRS) is open to all employers with a PAYE payroll scheme that was started on or before 19 March 2020 and it’s designed to support you if your business has been affected by coronavirus. To take advantage of the CJRS, you must designate affected staff as furloughed employees, notify them in writing of this change, keep a record of your communication for five years and then submit information to HMRC about furloughed employees and their earnings through a new online portal. Employees (and other PAYE workers) must have been on your PAYE payroll on 19 March 2020 to be eligible, but they can be on any type of contract, so it can include those on permanent, temporary, fixed-term, flexible and zero-hours contracts. However, furloughed employees can’t currently undertake any work for you (or for any linked or associated organisation) during furlough (but they can undertake volunteer work or training). So, if they’re working for you on reduced hours, or for reduced pay, they won’t currently be eligible under the CJRS (but the rules are to change from 1 August 2020 to enable furloughed employees to be brought back to work on a part-time basis). That said, you can furlough some employees and not others, provided you do this fairly. Plus, the minimum furlough period for each employee is three weeks and you can place an employee on furlough more than once, so there’s nothing to stop you rotating staff between work and furlough every three or more weeks.

Consent

There’s no right for an employee to be furloughed; you initiate the process. However, placing an employee on 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 Furlough is intended to obtain the employee’s consent in writing, both to the furlough and to the maximum amount of wages you’ll be paying during it. Note also that if 20 or more staff are involved, you’ll additionally need to comply with collective consultation obligations as they apply to changing terms and conditions of employment, if your other option to non-consent is redundancy.

Letter contents

Our letter sets out how long you expect furlough to last and in what circumstances it would end, what the employee would be paid during furlough (essentially 80% of their regular wages, subject to a cap of £2,500 per month), and confirmation that the employee can’t work, even from home, during furlough. It then asks the employee to sign and date the attached acceptance slip to confirm they’re willing to accept the furlough leave and pay 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.