Rebecca Bennett
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Date Published:29 May 2020 Last Updated:14 Apr 2021

​Updated Treasury Direction on the Furlough Scheme

Employment Law Advice

A new Treasury Direction for the Coronavirus Job Retention Scheme (“the Scheme”) has been issued by the Chancellor.

The updated Direction addresses some of the discrepancies between the first Direction, issued on 15 April 2020 and HMRC’s guidance on the Scheme.

The following key changes are noted in the updated Direction:

  • An extension of the Scheme to 30 June 2020;
  • Changes to the wording of the provisions that set out the form of agreement required when placing an employee on furlough i.e. the employer must put in place a written furlough agreement setting out the employee’s terms and conditions which is incorporated into their contract and must be retained until 30 June 2025 (paragraph 6.7). The employee’s implied agreement will suffice – in the original Treasury Direction this was not clear;
  • Further detail on the training furloughed employees may undertake (paragraph 6.8);
  • Confirmation that the date by which an employee must have transferred under TUPE in order to be eligible for furlough is 28 February 2020, reflecting the amended date in the guidance (paragraph 9.4);
  • Amendments to the wording of the statutory sick pay provisions which provides that furlough cannot begin until immediately after the end of the period of incapacity for work for which the SSP is being paid or due to be paid. (paragraph 6.3); and
  • Further detail on the definition of ‘regular’ pay that can be claimed under the Scheme i.e. ‘regular’ pay means pay that ‘cannot vary according to a relevant matter except where the variation in the amount arises from a non-discretionary payment’. Further definitions are provided under paragraphs 7.5 and 7.19.

Please see full details on the Treasury Direction. The updated Direction does not include an extension of the Scheme until October or details of the proposed changes to the Scheme from August, as previously announced by the Chancellor on 12 May 2020. We therefore envisage a further update by the end of May 2020.

If you would like any employment related advice, please contact our Employment Partner, Kate Brooks on 01202 525333 or email kate.brooks@ellisjones.co.uk.