COVID-19: Directors’ duties and furlough leave

legal updates

Directors should not do work of a kind they would carry out to generate commercial revenue or provide services on behalf of their company.

Read our disclaimer keyboard_arrow_down

This website content is intended as a general guide to law as it applies to the motor trade. Lawgistics has taken every effort to ensure that the contents are as accurate and up to date as at the date of first publication.

The laws and opinions expressed within this website may be varied as the law develops. As such we cannot accept liability for or the consequence of, any change of law, or official guidelines since publication or any misuse of the information provided.

The opinions in this website are based upon the experience of the authors and it must be recognised that only the courts and recognised tribunals can interpret the law with authority.

Examples given within the website are based on the experience of the authors and centre upon issues that commonly give rise to disputes. Each situation in practice will be different and may comprise several points commented upon.

If you have any doubt about the correct legal position you should seek further legal advice from Lawgistics or a suitably qualified solicitor. We cannot accept liability for your failure to take professional advice where it should reasonably be sought by a prudent person.

All characters are fictitious and should not be taken as referring to any person living or dead.

Use of this website shall be considered acceptance of the terms of the disclaimer presented above.

The Government provided a welcomed clarification in the update of 4 April to the Coronavirus Job Retention Scheme guide in relation to company directors.

The updated guide explains that a company director on furlough leave may still do a modicum of work to comply with the statutory duties if this work is not linked to generating profit:

‘Where furloughed directors need to carry out particular duties to fulfil the statutory obligations they owe to their company, they may do so provided they do no more than would reasonably be judged necessary for that purpose, for instance, they should not do work of a kind they would carry out in normal circumstances to generate commercial revenue or provides services to or on behalf of their company.’

The guide further suggests that the company’s decision to put a director on furlough leave should be formally adopted and noted in the company’s records. The director placed on furlough leave should be informed in writing of the company’s decision. 

Profit BoxDevelop your people like your business depends on it

What most people don’t know is that talent development doesn’t have to be complicated, high risk or expensive. Once they integrate key development stages, the results can be remarkable. Empower your team. Lead your industry. We’re your strategic learning partner, driving performance by moving skills forward.

Kiril MoskovchukTrainee SolicitorRead More by this author

Related Legal Updates

Pandemic impact on annual leave entitlement

The change in March 2020 allowed for four weeks of annual leave to be carried over. So, as a reminder, any carried over leave must be used in 2022!

See you in court… in a year or so…

Before deciding to issue or defend proceedings, it is important to consider how court delays may impact you as a business and as an individual.

End of COVID-19 restrictions – Employment implications

Until 24 March 2022, Statutory Sick Pay (SSP) will continue to be available to employees who self-isolate.

A word of caution – Dismissal of an anti-vaccination employee ruled to be fair

Does this decision lend grounds for employers to dismiss staff refusing a COVID-19 vaccine at present?

COVID-19 and the workplace

We have provided a list of answers to some frequently asked questions regarding COVID-19 and the workplace.

Goodbye 2021, hello 2022!

Despite an excess of 100 different commission claims hitting the Lawgistics’ desks, not one single dealer has had to part with their money.

Key worker claim dismissed

They presented witness statements from family members to back their claims of various things our client was supposed to have said.

Get in touch

Complete the form to get in touch or via our details below:

Phone
01480 455500
Address

Vinpenta House
High Causeway
Whittlesey
Peterborough
PE7 1AE

By submitting this quote you agree to our Terms & Conditions and Privacy & Cookies Policy.

This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.