The Coronavirus Job Retention Scheme: Terms Now PublishedHM Treasury published a formal direction to HMRC (the Direction) on 15 April 2020 in relation to the Coronavirus Job Retention Scheme (JRS). This Direction sets out the specific terms of the JRS and should be viewed as superseding the previously published governmental guidance. It is likely that the Direction will now form the definitive statement from Government on how the JRS will operate, although further practical and administrative guidance is expected from HMRC when the online portal for applications and payment opens next Monday, 20 April 2020.
For the most part, the text of the Direction reflects how we have previously understood the JRS to work (see our earlier client guides here for a detailed summary). However it also contains a couple of nasty surprises, together with one or two further changes to the position set out in the most recent version of the guidance as well as one glaring omission, with no clarification provided in relation to pay for annual leave.
The biggest twist is the addition of a new requirement for affected employees to have expressly agreed to furlough as a precondition to the employer’s participation in the JRS. There had been no prior indication that this was necessary and our experience is that a number of employers have relied on implied consent to implement furlough programmes. Unfortunately it is now clear that this will not be sufficient, and that an express consent process will be required. To this extent, at least, the Government appears to have moved the goalposts partway through the match.
In the briefing below, we consider some of the practical implications of the consent requirement, as well as identifying what we see as the other key points arising from the Direction.