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Flexible Furlough of Directors

Directors’ Flexible Furlough Agreement Letter


The Government has extended the Coronavirus (COVID-19) Job Retention Scheme until 30 September 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 .

This Directors’ Flexible Furlough Agreement Letter should be used by employers to seek the agreement of directors, who are contracted permanent employees, to work reduced hours under the Flexible Furlough Scheme. Records relating to these agreements should be retained for six years. A copy of the Directors’ Flexible Furlough Agreement letter should be retained for five years. Flexible furlough is a part work/part furlough arrangement. There is no requirement for employers to offer flexible furlough arrangements and they are able to leave directors on full furlough if they prefer.

The rules on how flexible furlough pay is calculated are complex but, in general terms, employers will claim a pro-rated amount of 80% of salary (up to a cap of £2,500 per month), based on the proportion of hours not worked out of normal working hours. In order to submit a flexible furlough claim, the employer is required to calculate a “baseline” number of “usual hours” so that this can be compared with the actual hours worked. Employers must pay directors who are employees in full for the hours they work.

This Directors’ Flexible Furlough Agreement Letter includes the following:

1. A definition of furlough leave;

2. The working pattern that will apply during flexible furlough;

3. The amount of salary that the Company will pay i.e. 80% or 100%; and

4. The director’s workplace during the periods they are working.

There are optional clauses depending on whether the director is being kept on flexible furlough or placed on flexible furlough for the first time.

Optional phrases / clauses are enclosed in square brackets. These should be read carefully and selected so as to be compatible with one another. Unused options should be removed from the document.

This Directors’ Flexible Furlough Agreement Letter is in open format. Either enter the requisite details in the highlighted fields or adjust the wording to suit your purposes.

Once you have purchased access to the appropriate document folder click on the “Download Document” link 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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