Furlough of Directors

Director’s Coronavirus Job Retention Furlough LetterUpdated

CO.CVF.01

If an executive director of a company is a contracted permanent employee of a company on or before 19th March 2020, they will qualify for furlough under the Government’s Coronavirus Job Retention Scheme (the Scheme).

This template form of letter can be used to furlough a director in line with the Scheme. This letter requires the relevant director to formally agree to being furloughed and the relevant template response letter, also in this subfolder, 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 template has been updated to reflect the extension of the Scheme until 31st July 2020. In addition, employers will be able to bring back furloughed employees on a part-time basis from August 2020 to 31st October 2020. The Government will provide more details in relation to this. 

This document is duplicated in the Coronavirus Job Retention Scheme (Furlough Leave) subfolder, which is in the Employment Folder. There are also information pages regarding coronavirus and private limited companies.

Once you have subscribed to the appropriate document folder click on the “Download Document” button below. You will be asked what you want to do with the file. It is recommended that you save the document to a location of your choice prior to viewing.

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