Important Furlough update
Added Friday 19th June:
Parliamentary question 17th June 2020
You may be aware that a question was raised by an MP to the Chancellor enquiring “whether agency supply teachers will be eligible for the CJRS during the school summer holiday period” The answer given yesterday (June 17th) by the Financial Secretary to the Treasury, Jesse Norman MP, was that “Agency supply teachers are eligible for the CJRS during the school summer holiday period where they are otherwise eligible for the scheme”.
It is positive that this matter is being raised with Treasury but unfortunately still does not provide clarity or have the legal standing to alter the Treasury’s published Direction in relation to payments for periods after a supply teacher’s assignment would normally have ended. As previously advised PEOPLE GROUP continues to engage with Government bodies and Ministers seeking further guidance on this important and sensitive issue. We will also continue to discuss the issue with the Unions, Trade Bodies and our Agencies to try to obtain the clarity required. We will as ever update you as soon as we receive formal clarification. In the interim, we continue to process payments for our Contractors on a weekly basis in advance of any claims being made to Government.
People Group also received an email containing a letter that we are informed comes from the NEU. Written to the Chancellor, Rishi Sunak, it seeks clarification on payments during school holidays. Please also note their confirmation that Treasury Directions required average wages to be calculated using 52 weeks and not 39 weeks. You can view the letter here.
Added Wednesday 3rd June:
HMRC Treasury Directive No2 – Impact on Term Time Workers
(Please also refer to the FAQs at the bottom of this page)
Late in the afternoon of Friday 22nd May, Her Majesty’s Revenue & Customs (HMRC) issued treasury directive No 2, an update to the Coronavirus Job Retention Scheme (CJRS).
We reviewed and compared this with the existing guidance and highlighted a change in the treatment of unpaid leave at paragraph 6.4.
What this means for contractors
The recent updates adversely impact ‘term-time’ workers who would not normally be at work during half term or school holidays and not normally be paid for these periods. Unless they were on holiday, sick or family leave this would mean that they were on unpaid leave and ineligible for furlough payments. This changed the previous guidance.
People Group quickly obtained a barrister’s opinion on our ability to pay term-time workers who would not normally be at work during these periods – it was confirmed that we should not. Were we to make payments, we could be liable to repay HMRC those payments at any point in the next 5 years following an audit.
Working with unions
On receipt of this opinion, we immediately sought to contact NASUWT and the NEU. We have since been in regular contact with NASUWT and have shared the opinion with them. NASUWT are themselves in contact with the Department for Business Energy & Industrial Strategy (BEIS) and HMRC seeking urgent clarification of the point – however, as of today, they have not received any update. We have not heard from the NEU.
As a result of the change to the guidance imposed by HMRC, it appears that many of our employees who are in receipt of JRS payments are not now going to be paid for the half term week and summer holidays going forward. This change provided very little time to give those affected any notice that they would not now be paid.
This is a government decision and not People Group’s, it is outside of our control. We are required to follow the government guidance as it changes.
What we are doing in response for our contractors
We have decided to try and help our contractors by giving them the option to take holiday for the May half term. Where holiday funds already exist this can be used for the half-term payment due this week. Where no holiday funds have been accrued we will allow an advance on future holiday accrual.
This is a contractor’s choice – if a contractor does not want to receive any payment for this week then they are free to choose that. However, should contractors be in need of a payment we have provided a facility to ensure that they get some pay.
What is the alternative?
The alternative would be to do nothing, not raise this with our contractors, and make no payments for term-time workers this week. We’ve tried to offer options to aid as many contractors as possible.
We are still lobbying on behalf of our employees, in conjunction with NASUWT, in relation to the Summer break but at this point in time have nothing further to report.
We will keep you updated as soon as we hear anything further.