Coronavirus: your questions answered

06 April 2020

Different kinds of workers and how they're covered by the Job Retention Scheme

Which employees are covered by the scheme?

Potentially, any employee who was on the employer’s PAYE system by 28 February 2020 is covered. This does leave any employees who were in the process of changing jobs and who joined their new employer at the beginning of March in some difficulty. It could also mean that employees who are transferred under TUPE (the Transfer of Undertakings (Protection of Employment) Regulations 2006) are left out. Although they will be deemed to have been continuously employed by their new employer, this will not alter the fact that they were not actually on the PAYE scheme at the relevant date. This is the sort of issue that HMRC may be asked to revisit when, for example, recently transferred canteen staff find that they may not qualify to be furloughed.

Does the scheme apply to zero-hours contracts?

It seems clear that the scheme will apply to anyone who is on the employer’s payroll. This mean that zero-hour staff will be included provided they are paid through PAYE. Those who are not on the payroll will not qualify under the furlough scheme but could benefit from a separate scheme aimed at the self-employed. This is something that those individuals will need to pursue directly with HMRC.

Does the scheme apply to agency workers?

It appears that it does. An agency worker who is on the PAYE system of the agency will qualify for furlough provided that he or she is not working. That would seem to mean that the end user can terminate the assignment of a particular agency worker and the agency would then be able to place that worker on furlough. Importantly the pay that the agency worker would qualify for would be calculated based on the either the earnings in the corresponding month of 2019 or on the basis of average earnings in the last tax year (whichever is higher). It would not be dependent on the pay the worker was receiving in the most recent assignment

Can we choose which employees to place on furlough and which to ask to come into work?

The guidance published so far suggests that it will be for the employer to designate an employee as furloughed in which case the choice of who to place on furlough will be essentially one for the employer to make. It would be sensible when making the choice to take into account the personal circumstances of individual employees. Those with caring commitments for example might find it much harder to continue working – even from home – than those without. Ultimately however the employer will be able to make its decision based on the needs of the business ensuring that it retains access to the skills and experience that it needs to continue operating as best it can. We have been advising employers to consider using objective criteria similar to that used in a redundancy selection, to ensure a fair selection process is followed.

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