Skip to main content
Sign up to updates
FIND A LAWYER
ARTICLE

Guidance for Companies on Furloughing Directors

The Government has issued welcome guidance – in relation to the position of company directors who are furloughed.  The Coronavirus Job Retention Scheme (CJRS) means that a company can furlough its employees (including directors) and claim back money from the government, subject to various criteria.

Previous guidance stated that employees who were furloughed must not do any work for the company.  This position was unsatisfactory for directors, who have both statutory and fiduciary duties to the company and a role as office holders in addition to their role as employees.  It meant that they would be in a difficult position whereby, if furloughed, they could not perform any of the tasks necessary as part of those duties to the company.

Comment
This is a welcome change for directors who do not want to be in breach of their duties whilst furloughed.  Directors are in a unique position; whilst being employees, they also have duties that they owe to the company which can be enforced against them.  They can now continue to perform their duties whilst furloughed, provided they only do what is absolutely essential.

Greenwoods Legal LLP is a Limited Liability Partnership, registered in England, registered number OC306912. Our registered office is Queens House, 55-56 Lincoln’s Inn Fields, London, WC2A 3LJ. A list of the members’ names is available for inspection at our offices in Peterborough, Cambridge and London. Authorised and regulated by the Solicitors Regulation Authority, SRA number 401162. Details of the Solicitors’ Codes of Conduct can be found at www.sra.org.uk. All instructions accepted by Greenwoods Legal LLP are subject to our current Terms of Business. VAT Reg No: 161 9287 89.




    By completing and submitting this form, you consent to Greenwoods Legal LLP processing your personal data to provide you with the email update services you have selected and any other materials and information about our services that Greenwoods Legal LLP reasonably believes will be of interest to you. You are free to withdraw your consent at any time by emailing mailinglists@greenwoods.co.uk