Furloughed employees must have agreed if you want to make your claim for 80% of their pay. You will need evidence of that agreement from employees (and workers on PAYE). If not, you could face an Employment Tribunal claim for 20% of their pay and no right to reclaim anything from HMRC!
You probably have strong reasons to gain agreement to furlough from your workforce but, as with any contractual “agreement” it will be invalid if enforced unilaterally or under coercion. I’ve examined elsewhere why voluntary agreement should be forthcoming and what you might do if it is not.
Want to furlough and no lay-off clause?
If you need to persuade employees to continue working, while you furlough others, that needs explaining to the continuing employees. There could be potential for discrimination claims if “protected characteristics” (such as gender) come into play.
Every employer’s circumstances can be different and while templates are available it can be advantageous to construct your own letter.
Before furloughing employees, you should explain the reasons for furlough and obtain their agreement. These may be self-evident but not always. You may want some employees to work from home, others to attend work and perhaps others to work in different circumstances. Employees who are furloughed (or especially not furloughed) are entitled to know why.
A furlough agreement it needs to be in writing if you are to make a claim for a portion of their wages. In seeking agreement, you need to set out several matters such as the review date and how much they will be paid. It is wise to take the opportunity to agree what the furlough means for the employee, requirements to keep in touch and any other terms and conditions that you might like to vary in the light of the circumstances.
It would be valuable to end on a positive note. The purpose of furloughing is to bring the organisation through a difficult time and you might like to express confidence that normal activities will resume in due course.
Finally, get a signature from each employee that they have agreed to be furloughed on the terms you have outlined.
*Please get in touch if you need any support with regards furloughed workers, we are advising employers on this process daily and have developed communication that can be sent to affected employees.
Updated 20th April 2020
Malcolm Martin FCIPD
Author Human Resource Practice
Blogs are for general guidance and are not an authoritative statement of the law.