Employees cannot undertake work for their employer while they are on furlough, but what constitutes work?

Prior to 1 July 2020, to be eligible to make a claim under the Coronavirus Job Retention Scheme for an employee's wage costs, the employer must have instructed the employee to cease all work in relation to their employment. From 1 July 2020, a furloughed employee can work on a flexible, part-time basis for their employer (known as "flexible furlough"). The employer can claim under the scheme for the hours that the employee does not work and is recorded as being on furlough.

Guidance published by HM Revenue and Customs (HMRC) provides that, while on furlough, the employee cannot do any work that makes money or provides services for the organisation (or any "linked or associated organisation"). This is the same whether the employee is fully furloughed or on flexible furlough.

The guidance states that an employee can undertake training or volunteer work while they are on furlough, provided that in doing so they do not provide services to, or generate revenue for, or on behalf of, the employer. It also confirms that a furloughed employee who is a union or non-union employee representative can carry out duties and activities for the purpose of individual or collective representation. Again, this is provided that in doing so they do not provide services to, or generate revenue for, or on behalf of, the employer.

There is no provision for the equivalent of keeping-in-touch days for furloughed employees, and there is no guidance on what kind of contact the employer can have with the employee. An employer will need to keep in contact with furloughed employees to support their wellbeing and to inform them of developments such as the expected length of the furlough. However, it appears from the guidance that the employer should not ask employees to respond to emails or calls related to the operation of the business while they are on furlough, where this could involve providing a service or generating income for the employer.

HMRC states that it reserves the right to retrospectively audit claims made under the scheme. This could include checking that employees have not been required to continue working during the hours when they are recorded as being on furlough. However, it is not known how extensive these audits may be, or the approach that HMRC would take to minimal work-related contact.