Flexible furlough: new Treasury Direction published

The government has published a new Treasury Direction setting out the legal basis for flexible furlough from 1 July until 31 October.   

From 1 July, furloughed employees will be able to return to work on reduced hours. Employers will have to pay them in full for the hours worked but will be able to claim a grant to help with employees’ wages for hours not worked. Employers can also continue to fully furlough employees if they wish.  

The government has already published guidance for employers on flexible furlough but the Treasury Direction contains the legal rules for operating the coronavirus job retention scheme. 

It was unclear from the published guidance whether employers agreeing flexible furlough arrangements had to get a written agreement signed by the employee. The Direction indicates this is not necessary. Instead, there simply needs to be an agreement with the employee which is confirmed to the employee in writing (which may be in electronic form such as an email). The agreement can also be by means of a collective agreement. The Direction says the agreement must be made before the beginning of the period to which the claim relates (so cannot be made retrospectively) but can be varied subsequently to reflect any variation agreed during that period. 

For further information on flexible furlough see our update

HMRC has also published guidance for employers on how to repay overclaimed furlough grants.