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COVID-19: Furlough – Workers, Employees, Contractors and TUPE


Agency Supply

Most schools will have some kind of ongoing relationship with supply agencies.

Typically, supply workers will be employed by the agency and paid on the basis of placements fulfilled (signed timesheets being required to evidence work undertaken). Whilst the agencies are able to benefit from the Government’s Coronavirus Job Retention Schemev (“CJRS”), there is an expectation that public bodies continuing to be in receipt of public funds will continue to pay for agency workers notwithstanding the closure of the school (see Procurement Policy Note 02/20 – Supplier relief due to COVID-19). For those on long term supply, this would seem appropriate and as the school will have budgeted for this cost there is no reason for schools not to honour the arrangement. Schools have a legal duty under the Agency Workers Regulations 2010 (the “Regulations”) not to treat agency workers less favourably than employees in relation to basic working and employment conditions. However this duty only arises once an agency worker has been working at the school for a qualifying period of 12 weeks.

Agency workers who continue to be paid and treated as staff should be asked to work from home if possible, provide work for pupils if a teacher is absent and to contribute to any roster designed to provide staffing cover whilst the school remains partially open. Agency staff should also be prepared to be redeployed where the school (or indeed academy trust) may need them.

The situation for agency workers who do not qualify under the Regulations is likely to be more flexible and we have recommended to clients that a statement is provided to agencies setting out the school’s policy on terminating any temporary supply. Ideally this should be coordinated across a MAT, where appropriate. This would be on the basis that the school is exercising its discretion under the PPN 02/20 and in the knowledge that the agency may either “furlough” workers (under the Coronavirus Job Retention Scheme) or redeploy them themselves as the employer to other schools who are in need of short term staffing support. We would not expect agencies to profit from any arrangement by continuing to be paid by schools and yet redeploy non utilised supply workers on other short term contracts.

Self-employed contractors and workers

Self employed contractors that are employing and supplying their own staff to the school should also be able to access the Coronavirus Job Retention Scheme for their own staff. A self-employed consultant or worker may also have support available to them under the Self Employment Income Support Scheme.


The Government’s position is that funding for schools will continue as normal during the period of closure. However in some cases income to meet specific staffing duties may have reduced or disappeared altogether, for example catering staff funded through parental payments and sports centre staff funded through lettings income/charges payable by members of the public.

DfE guidance is clear that for organisations that are classified as public sector, and where there is continued public funding, staff that are supported by that public funding should not be furloughed. For public sector organisations where there is also private income which has ceased or reduced, it may be appropriate to furlough staff who would typically be paid from that private income subject to the certain conditions being met. It is important to note that the furlough scheme is applicable to employees only.

Coronavirus Job Retention Scheme up to 30 June 2020

The Coronavirus Job Retention Scheme applicable to the period 1 March 2020 to 30 June 2020 enables employers (i.e. the MAT or the Governing Body in the case of voluntary and foundation schools) to claim a grant from HMRC to cover 80% of the wages costs, up to a maximum of £2,500 per month, for employees who are furloughed (not working but kept on payroll). Staff must have been placed on furlough leave between 1 March 2020 and 10 June 2020 and must have been on PAYE as at 19 March 2020 (this was changed from the previous date of 28 February 2020 in order to reflect those starting work before the lockdown). The employer is not required to top up the remaining 20% of the employee’s salary. The scheme is designed to avoid employers otherwise having to make redundancies or lay off workers.

As employment contracts are very unlikely to provide for any kind of furlough leave (and any reduction in pay is automatically unlawful), furlough leave needs to be agreed with relevant employees. A formal agreement or letter could be used to evidence that agreement. We have drafted a template for this purpose. Please contact a member of the School Support team if you would like a copy.

Details about furlough for schools can be found here.

Schools who have furloughed staff should be aware that claims for the period ending 30 June 2020 must be made to the HMRC by 31 July 2020.

Coronavirus Job Retention Scheme from 1 July 2020

On 12 June 2020 HMRC published further guidance regarding the extension of the Coronavirus Job Retention Scheme. Crucially the guidance confirms that only employees who have been furloughed for a minimum 3 week period at any time between 1 March 2020 and 30 June 2020 will be eligible for the extended scheme (save for some limited exceptions such as where there was TUPE transfer after 10 June 2020 and provided all other conditions are met). Therefore any employee who was not on furloughed on or before 10 June 2020 will be ineligible for the scheme.

The further guidance confirms that from 1 July 2020 furloughed employees will be able to return to work on a part-time basis. Employers will pay their salary in full for days worked and can claim under the scheme for days not worked, subject to the relevant caps. It is recommended that a further furlough agreement is entered into with an employee to reflect the new flexible/part-time arrangement, unless they are to remain fully furloughed. A template is available from our School Support team.

The revised flexible scheme will continue until 31 October 2020.

Coronavirus Job Retention Scheme from 1 August 2020

From 1 August 2020 employers will be expected to start making contributions to employees’ 80% furlough pay as follows:

  • August 2020: employers to pay the employer national insurance and pension contributions on the furlough pay.
  • September 2020: in addition employers to also pay 10% of employees’ furlough pay, capped at £312.50. The government will pay the remaining 70%, capped at £2,187.50.
  • October 2020: employers to pay 20% of employees’ furlough pay, capped at £625. The government will pay the remaining 60%, capped at £1,875.

Where an employee has returned to work part-time as part of the flexible scheme applicable from 1 July 2020, the caps will be proportional to the hours not worked.

Whilst there is some uncertainty on the detail, it should be possible to furlough and make an application for staff with dual contracts or multiple roles. The school should seek to make a claim only for that element which would have been funded by non public funds (in a nursey setting for example the parent top up not the LA funded hours). The application process will rely to a large part on self-certification and therefore schools must keep a record of how a decision is made to decide if a role (or part of a role) is not publicly funded. As the scheme is designed to avoid laying off staff and making redundancies, schools should seek to redeploy staff in the first instance, particularly where only part of a role is affected by the loss of funding.

Similar considerations might be relevant to other staff, particularly those on short term contracts, casual or zero hour contracts or consultancy arrangements whose role is in effect now redundant. Examples include exam invigilators, peripatetic music teachers, some learning support assistants and others providing interim school improvement support. Schools might wish to consider utilising the principle of furloughing in order to reasonably reduce cost in the short term even though the role may be primarily publicly funded (particularly where staff cannot be redeployed).

It is impossible to generalise as to the right approach for each category and schools should avoid a one size fits all solution. Schools should be alert to the risk that some workers may seek to argue that they have employment status as a way to improve their position and entitlements.

We can provide case specific advice if needed.

Furlough and TUPE

Consideration should also be given to staff on furlough who are transferring to a new employer by operation of TUPE. As part of due diligence the incoming employer (transferee) should request from the outgoing employer (transferor) details of any furloughed employees. This information should include the dates of furlough, whether they remain on furlough or have returned to work part time and the date it is anticipated they will return to work full time (if known).

Employers are likely to be able to claim for employees who transfer under TUPE where there is a relevant business transfer. It is important to note that both the HMRC Guidance and Treasury Directions refer to a business transfer and are silent on a service provision change scenario (SPC). It is therefore not so clear whether the incoming employer in a SPC would have the benefit of claiming for the furloughed employees who have transferred to them. An SCP includes where a service is outsourced to a contractor, or there is an insourcing exercise, or where a contract is re-assigned to a new contractor. It is of course possible that an SCP also amounts to a business transfer however this will depend on the specific facts.

TUPE is a complex area of law. Our recommendation is that specialist advice should be sought early on in a TUPE process to identify and manage any risk arising out of the CJRS. Incoming employers may inadvertently be placing themselves at substantial financial risk by proceeding with a transaction on the mistaken belief that they can claim under the CJRS for TUPE’d employees. Caution should particularly be exercised where there is an SPC.



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