We would like to draw your attention to a document produced by HM Treasury, which provides HMRC with the powers to manage the Furlough process and payments. A link to the document is below, should you wish to read the full document. However, we would like to point to the following two paragraphs within the document:
6.1 An employee is a furloughed employee if:
(a) the employee has been instructed by the employer to cease all work in relation to their employment,
(b) the period for which the employee has ceased (or will have ceased) all work for the employer is 21 calendar days or more, and
(c) the instruction is given by reason of circumstances arising as a result of coronavirus or coronavirus disease.
6.7 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.
In addition, we would like to draw your attention to the following advice from the CIPD (Chartered Institute of Personnel & Development):
If an employee is still working (even if pay and hours are reduced) then the employer cannot furlough them and claim the government grant under the scheme. Even tasks such as basic administration, replying to customer care emails or briefing colleagues with handover information are services. Even if these tasks are not revenue generating, they may count as work. Furloughed employees can’t provide services for their employer even if it’s in a different role, unless the official advice changes.
HMRC has expressly retained the right to retrospectively audit all aspects of employers’ claims. They have said that employers who flout the rules will be committing a criminal offence and will jeopardise all the payments under the Job Retention Scheme.
We would therefore urge clients to ensure that they have an agreement in writing with the furloughed member of staff, stating that the member of staff will cease work. You may wish to specifically state within that agreement that this includes: checking or forwarding their emails; responding to work phone calls; or undertaking any activity on behalf of the business. For an example letter/email to your employees, please see here.
For the full HM Treasury document please click here.