Flexible Furlough: Template Employer’s Written Agreement now available
From 1 July 2020 the CJRS will be updated to include a “Flexible Furlough” option. This option will allow employers to bring employees back to work part time whilst still being able to claim furlough pay from the government for any hours not worked.
The guidance which we have received from the government to date makes clear that any flexible furlough arrangement must be agreed with an employee and recorded in writing. A flexible furlough arrangement will constitute a formal variation to contact to which an employer must obtain an employee’s express consent. Employers do not have an automatic right to place employees under a flexible furlough working arrangement, even where the employee has previously been furloughed. It also seems that a written agreement is actually a pre-requisite to claim under the CJRS post-1st July and so it is imperative that such an agreement is in place if you do not wish to risk HMRC not paying out.
To enable employers to adhere to their obligations in this regard, we have prepared a Flexible Furlough Agreement and clients should log in to their Client Portal in order to access the document. The Agreement is extremely comprehensive on the basis that: it needs to be in order to comply with legal requirements, and because it seeks to address as many permutations of flexible furlough as possible. The Agreement also sets out details regarding related matters such as rotation of “full furlough”, annual leave and sickness. Employers who want to enter into flexible furlough arrangements with their employees are advised to read this Agreement very carefully and issue it to those employees in question. As drafted, the template Agreement contains a number of optional provisions (referenced in square brackets) and a number of choice provisions.
We are of course on hand to advise on the preparation of any written agreements and you should feel free to contact a member of the Employment Team at any time. Some headline points for employers to be aware of at this stage however include:
- Full furlough is still permitted post 1st July and employers do not have to flexibly furlough staff.
- Employers still have the option of paying furlough pay or full pay for any hours not worked under the flexible furlough scheme.
- Under the flexible scheme an employee can be furloughed for part of a week or, part of a day, or a mix of the two.
- The agreement as written contains provision allowing employers to recover payments made where claims under the CJRS are unsuccessful and to delay pay dates if the receipt of furlough pay is late.
- If an employee falls sick during any flexible furlough arrangement, normal sickness provisions apply.
- The agreement includes a contractual lay off/short time work provision for use at the end of the furlough scheme in October if there remains insufficient work.
- Holidays, including bank holidays, will still accrue during flexible furlough and as written the agreement sets out all relevant provisions including the two year roll over.
- An employer does need to be clear what hours will and will not be worked in any written agreement: having a general flexible working arrangement in place or, an “on-call” type arrangement will not be permitted. If an employer wants to vary the flexible working pattern, they will need the employee’s consent to do this and a side letter confirming the change in hours should be put in place.
As above, please do not hesitate to contact a member of the Employment Team should you require advice on the Flexible Furlough agreement or, indeed any aspect of the furlough scheme affecting your business.