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Furlough and public funded emplyees
Should public funded employers who are still receiving public funding continue to pay their employees from this budget to cover those who are shielding? Can they instead furlough them if as a result of the employee unable to do their (essential services) job the employer incurs additional staffing costs?
Examples being 2 extremely vulnerable clients: a medical secretary (job funded by NHS) and a cleaner in a care home (public funded) both shielding for 12wks as per NHS letters
Both have said they are unable to furlough - one said they are NHS so can’t furlough, another said as there is still work available they can’t be furloughed.
The guidance states this but doesn’t expressly exempt them from the other criteria for self-isolating or shielding?
If you’re a public sector employee
The government expects that the scheme will not be used by many public sector organisations, as the majority of public sector employees are continuing to provide essential public services or contribute to the response to the coronavirus outbreak.
Where employers receive public funding for staff costs, and that funding is continuing, we expect employers to use that money to continue to pay staff in the usual fashion – and correspondingly not furlough them.
This also applies to non-public sector employers who receive public funding for staff costs. Organisations who are receiving public funding specifically to provide services necessary to respond to COVID-19 are not expected to furlough staff.
In a small number of cases, for example where organisations are not primarily funded by the government and whose staff cannot be redeployed to assist with the coronavirus response, the scheme may be appropriate for some staff.
If you work for the public sector, you can get more information about how the scheme works for you from your UK Government Department, employer or, in the case of employers funded by the Scottish Government, Welsh Government or Northern Ireland Executive, through your respective administration.
I spoke to HMRC online who said this and have referred me for a callback for tier 2 advice
Organisations that receive public
funding for staff costs, even if they’re
not in the public sector, • use that
money to continue paying them • not
furlough their staff They can still use
the scheme if both of the following
apply: • they’re not primarily funded by
the government • their staff cannot be
redeployed to assist with the COVID-19
response.
There is a separate issue in respect of people who are shielding which I raised here https://www.rightsnet.org.uk/forums/viewthread/15922/
People who are shielding are entitled to SSP. The Treasury Direction which implements the CJRS appears to say that people entitled to SSP cannot be furloughed contrary to other guidance available.
The recent House of Commons briefing here https://commonslibrary.parliament.uk/research-briefings/cbp-8880/?utm_source=HOC+Library+-+Research+alerts&utm_campaign=920c172683-EMAIL_CAMPAIGN_2020_04_22_08_00&utm_medium=email&utm_term=0_a9da1c9b17-920c172683-102519765&mc_cid=920c172683&mc_eid=896f3be410 confirms that this conflict exists.
I quote:“The Treasury Directive says that if an employee is currently receiving, or is liable to receive, statutory sick pay (SSP), they can only be furloughed when their SSP period ends…Again, the text of the Direction appears to contradict the position in the guidance for employers which stays that employees on sick leave can be furloughed if the decision is made on business reasons.
This could have consequences for extremely vulnerable employees who are liable to be paid SSP if they are shielding and cannot work from home.”
This is only one of several conflicts identified.
As the briefing points out “The Treasury Direction is made under the statutory power conferred by section 76 of the Coronavirus Act 2020. It has legal force and is the document that HMRC is bound to follow when making decisions about issuing grants under the Scheme.” and “where there are inconsistencies that cannot be reconciled, the Direction will prevail”.
The legal position appears therefore to be that it is questionable whether anyone who is shielding can be furloughed given their entitlement to SSP.
So for this you’re saying no employee who is shielding (whether public funded or not) can be furloughed (or at least the employer cannot claim through the furlough grant) as essentially their entitlement to SSP overrides the furlough criteria?
What about public funded employers where for example the employee is unable to work or work from home due to children/child care?
On the point about those eligible or SSP not able to use the JRS - how/why would HMRC check the individual employee circumstances to determine whether SSP or the JRS is appropriate?
On the point about those eligible or SSP not able to use the JRS - how/why would HMRC check the individual employee circumstances to determine whether SSP or the JRS is appropriate?
That’s a fair point - I don’t think they can so the discrepancy I’ve raised may be academic.
No callback from HMRC tier 2 but did get this from our expert team
There is no absolute bar on a publicly funded employer furloughing staff and there are probably cases where it would be reasonable for them to do so.
The problem is that if they have already decided they don’t want to run the risk of using the scheme inappropriately there is nothing the client can do about that. Unless the guidance is updated (which is possible) clients can make their best case to the employer but have no option but to accept their decision.
The public funding rule means it is very difficult for employers in receipt of public funding to furlough shielding staff or those with childcare
[ Edited: 5 May 2020 at 10:14 am by Tara CAC ]