The Government has extended the Coronavirus (COVID-19) Job Retention
Scheme until 30 April 2021. The
Coronavirus Job Retention Scheme Furlough Leave Agreement ( available here )
and the Flexible Furlough Agreement Letter ( available here )
templates have been updated and are now available to use for the new
extended Coronavirus Job Retention (Furlough) Scheme announced by the
Chancellor on 5th November 2020.
If an executive director of a company is a contracted permanent employee of
a company on or before 30 October 2020, they will qualify for furlough
under the extension to the Scheme.
This template form of letter can be used to furlough a director in line
with the extension to the Scheme. This letter requires the relevant
director to formally agree to being furloughed and the template response
letter (see above) should be attached so that the director can return it to
the company in a timely manner.
Once a director is furloughed, they must not continue to provide any
further “commercial” service to their employer (the company). However,
unlike other employees, directors have Companies Act 2006 duties to
maintain and this letter refers to the reasonable necessity to fulfil these
duties. This will be particularly important for sole directors, because a
company cannot operate without its directors and all directors have ongoing
fiduciary duties to their companies. This form of “part” furlough will be
different for each company and must be given serious consideration before
the decision to furlough is made. This template letter refers to a
director’s Companies Act 2006 obligations and the “part” furlough involved.
This document is duplicated in the
Directors Service Contracts
subfolder, which is in the Corporate Folder. There are also information
coronavirus and private limited companies.
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