Coronavirus Job Retention Scheme

Yesterday HMRC guidance was updated and the Treasury issued a Direction to HMRC regarding the Coronavirus Job Retention Scheme.

There were several new requirements included in the Treasury Direction which are different to the previously issued HMRC guidance, and changes the terms upon which a furlough grant can be claimed. We have outlined the three most important points that may require immediate action by employers to safeguard their ability to obtain the furlough grant from HMRC.


The first requirement is that the employer must have instructed the employee to cease all work in relation to their employment. 

If any customers downloaded and used the 'Furlough Letter Template - SL88' from the Customer Zone at, or after, 4pm on Friday 3rd April 2020 the template contains sufficient wording that would amount to an instruction to cease work for the employer. We recommend you check your version of the letter to ensure that the following wording was not deleted before sending the letter to employees:

“During Furlough you may not carry out any work for us and you agree that we are under no obligation to provide any work to you. You should not attend your usual workplace or carry out any work on our behalf including provision of any services to or generation of any revenue for us…..”

If the above wording was included then no further action is necessary.

Any customers who used the earlier versions of the template, or who removed the wording outlined above, should urgently send new, updated furlough letters to their employees and ask them to sign and return the agreement to be furloughed. You can explain in the letter that Treasury and HMRC guidance has recently changed and this is the reason for the updated letter.

This is very important to ensure that your entitlement to receive a furlough grant is protected as far as possible.


The Treasury Direction states that in order to claim the furlough grant, the employer and employee must have agreed in writing that the employee will cease all work. This differs from the previous guidance where the employer was only required to notify the employee that they had been furloughed.

Customers who have used our template documents seeking the employees consent will be able to comply with this new requirement, provided the employee signed and returned the document agreeing to be furloughed and/or any reduction in pay. 

We recommend customers check that all employees who have been furloughed have signed and returned their consent forms. In cases where this has not been received, it is imperative that steps are taken to recover the signed agreements as soon as possible. Failure to provide evidence of an agreement could result in HMRC rejecting claims for the furlough grant.


The requirement for an agreement between the employer and employee has also called into question the validity of relying on lay off clauses for consent to furlough. Currently, commentators are split on whether the inclusion of lay off in a contract of employment is sufficient consent to furlough an employee. Please contact your legal advisor if you have relied on lay off to furlough employees and provide them with a copy of your contract of employment.


We are the HR and employment law experts from ESPHR.

It’s our mission to advise and develop the employment law capability of HR professionals wherever we can, helping HR teams make a real commercial difference to their organisations. That way, you spend less time solving operational issues and more time actioning projects that drive far-reaching change in your company.

Call 0333 006 2929 or email today to discover exactly how we can help you.


Author: Sarah Dillon

Director, ESP Law Ltd

Sarah is a litigation expert with over 15 years’ experience. Sarah embarked on her career in employment law as an advocate for an employment law consultancy and continued as an advocate alongside being an employment law advisor for a plethora of reputable UK law firms including: DAC Beachcroft, Ward Hadaway and Richmonds Solicitors, where she was head of the employment department.