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Free Furlough Leave Agreement for a director

This furlough leave agreement letter is designed specifically for use by a company, to place one of its salaried (PAYE) directors on furlough leave under the Coronavirus Job Retention Scheme, and to request the director’s consent to you doing so. The letter also sets out the arrangements that will be in place during the director’s furlough leave, including the Government prohibition against furloughed directors carrying out any work (and the limited exception to allow directors to fulfil certain statutory duties). The letter might also be referred to as a furlough notice, a furlough agreement or a furlough arrangements letter.

The Coronavirus Job Retention Scheme allows employers to designate staff (including directors) as ‘furloughed workers’ and to claim a grant of 80% of their wages, up to a maximum of £2,500. This is designed to prevent employers from having to make redundancies during the COVID-19 pandemic.

Once your director has signed up to the terms in this letter, use Furlough leave confirmation letter to confirm they have been placed on furlough leave, and keep a copy of this for 5 years.

The decision to furlough a director must be taken by your company’s board of directors and properly recorded. Our template board minutes approving furlough of a director include all the necessary approvals for a company with model articles, and link to the accompanying shareholder resolution if this is required.

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