It has been a matter of some debate over the past few weeks as to whether or not employers needed a written agreement from an employee to cease all work in order to be able to claim under the Coronavirus Job Retention Scheme.
This arose as a result of a discrepancy between the Treasury Direction, which stated that employees need to agree to cease all work in writing, and the guidance published by HMRC which stated that written agreement from the employee was not necessary.
HMRC has today confirmed, by way of a direct response to the question being asked by leading employment law barrister Daniel Barnett, that employers should follow the guidance and that all applications made under the scheme will be treated in accordance with the guidance.
As part of the response provided by HMRC, they have confirmed that “the employer and employee must reach an agreement and an auditable written record of this agreement must be retained. It does not necessarily follow that the employee will have provided written confirmation that such an agreement was reached in all cases”
This is a relief for many employers who were worried that the Treasury Direction issued on 17thApril meant that claims for furlough pay would be rejected without a written agreement signed by the employee.
It is a clear statement from HMRC that they will not reject claims made by an employer on the basis that the employer has not obtained written agreement from the employee to cease all work for them.
Employers must however ensure that they keep a record of their correspondence/agreements with staff for a period of 5 years, presumably to satisfy any retrospective HMRC investigations.
