HCR Law Events

27 May 2020

Can schools furlough staff (including teachers) during the summer holidays?

The Coronavirus Job Retention Scheme (the “Scheme”) which was initially announced by the Government on 20th March 2020, has now been extended to the end of October 2020. The detail of the Scheme for the period after the end of July is still unclear and we are currently awaiting further guidance on this, which the Government has committed to publish by the end of May.

The Scheme affords all UK employers, regardless of size or sector, the ability to claim funding from HMRC to cover 80% of the wage costs of its furloughed employees (an employee who is not working at this time but kept on the payroll), currently up to a maximum of £2,500 per calendar month for each employee. We understand that the Scheme may have been accessed by a number of schools, particularly in relation to support staff, while schools remain predominantly closed. We refer you to our previous guidance notes on the Scheme dated 27th March, 7th April and 17th April.

We understand few schools have furloughed large numbers of teachers to date as the majority are required for the delivery of the online curriculum. There may be a requirement for furloughed teachers and other staff to be brought back in to school as part of the wider opening in June and beyond.

The question we are frequently asked at the moment is whether, now that the Scheme has been extended to the end of October, a school can furlough staff, including teachers, over the summer holidays, whether at 80% of salary (subject to the current cap) or with a top-up to 100%.

In summary, it is our view that it is possible to furlough staff, including teaching staff, during the summer holidays, but the school should weigh up a number of considerations and make any decision on a case by case basis, depending on the particular circumstances.

The Scheme

The specific circumstances in which an employer can put an employee on furlough, and claim reimbursement through the Scheme, were previously unclear due to inconsistencies between the various guidance and the government’s initial suggestion that an employer needed to demonstrate a threat of redundancies.

The Treasury Direction (the “Direction”) dated 15 April 2020 appears to clarify that a redundancy situation is not a pre-condition for access to the scheme.

Although the wording in both the Direction and guidance differs, together it suggests that if a school is adversely affected by Covid-19, and may be unable to maintain their current workforce, they will be able to access the Scheme for their employees.

There is currently no specific guidance which explicitly addresses the issue of whether a member of staff is required to be at work in order to be furloughed. During the summer holidays, a teacher is paid, is not on holiday in the usual sense, but is not required to be at work (and the school would have no work for the teacher, not as a result of coronavirus). We anticipate that when the latest guidance is published later this month, it is unlikely to address this issue as it has limited application.

Schools which receive public funding, such as academies and maintained schools, are generally unable to furlough staff and access the Scheme.

What should a school consider when deciding whether to access the Scheme for the summer holidays?

Schools may be considering furloughing staff for July and August as a means of saving costs and reducing the prospect of possible future salary cuts and/or redundancies. It is clear that a significant number of schools have been affected by coronavirus in terms of fees and other income; some schools may be able to demonstrate a more severe impact than others.

A school should consider the contractual position of different types of staff in order to consider whether furlough is an appropriate option. For all staff, including teachers, if the contract of employment expressly says that all school holidays are ‘holiday’ (as opposed to the employee not usually being required to work), it may not be possible to furlough those staff and advice should be sought.

1. Term time only staff

For term time only (TTO) staff there is often a contractual requirement that they work only during term time but are paid in 12 equal monthly instalments over the year. The contract of employment for TTO staff often says that they will not be required to work during the school holiday period.

The Treasury Direction is clear that while an employee is furloughed, the employee must be instructed by the employer to cease all work in relation to their employment and that instruction is given by reason of circumstances arising as a result of coronavirus. If there is no work for a TTO member of staff, the reason for this is likely to be their usual working pattern and contract terms and not because of coronavirus (in the same way that a school may decide not to furlough an employee on a zero hours contract). It is difficult to see how a school could in those circumstances furlough a TTO member of staff when that employee would not usually be carrying out any work for the school during this period.

2. Year round staff

For year round staff, the situation is different. Once again, the terms of the contract of employment will be key in determining whether the school is legitimately able to say that the employee must cease all work in relation to their employment and that instruction is given by reason of circumstances arising as a result of coronavirus. It is more likely that, for year round staff, furlough may be appropriate over the summer holidays, particularly if the operations of the school are not ‘business as usual’.

3. Teachers

For teaching staff a school might wish to consider what, if any, work a teacher may be required to do over the summer holiday. Schools may be unlikely to furlough all teachers over the summer as there will be work preparing for the autumn term, for example. Our other notes (referenced above) cover this in more detail. It may be correct that usually a teacher would not normally be required to work during the holiday (and the school would not have work for them to carry out) however the terms of their contract of employment are likely to differ from a TTO member of staff. Even if the teacher would not usually be required to work, in reality it is likely that by and large many teachers carry out some sort of work over the summer holidays, this will vary considerably. A teacher may also be responsible for school trips during the school holiday period which would be classed as working. If the school is faced with difficulties in maintaining their current workforce because the school has been severely affected by coronavirus, then it would be perfectly acceptable for the school to consider furloughing those staff members.

Other factors

Each school will need to consider their own particular circumstances. Schools who may be considering restructures, redundancies and other ways of saving staff costs, should give serious consideration to accessing the Scheme including provision over any school holiday period. From August, employers will have to contribute to furlough so the cost-savings will be more limited from that point on.

A wealthier school with considerable funds, might not be acting in the spirit of the Scheme if they access furlough and may face significant negative PR or media backlash if they choose to furlough rather than use school reserves. A school should consider how they would respond if this is the case. It is worth remembering that the Scheme is not means tested and appears to be as much about income protection for staff than avoiding redundancies, as well as the possible argument for safe stewarding the assets of a charity (if indeed the school is a charity). A school which does not access the Scheme may be asked by staff who may be facing a pay freeze or other measures for example, why the school chose not to do so. Schools should record any decision making and must be aware that they may be audited by HMRC in the future.

Summary

There is inconsistency between the Treasury Direction and the government guidance which is not helpful. Although the guidance for employees refers to furlough as applying when the employer is unable to operate or has no work for the employee to do, the guidance for employers says that all employers are eligible to claim under the Scheme and that the government recognises that different businesses face different impacts from coronavirus.

It is worth remembering that, when using the HMRC portal to make a claim, employers are required to confirm that they are claiming, “costs of employing furloughed employees arising from the health, social and economic emergency resulting from coronavirus.” These are the words from the Treasury Direction and in our view, is the test which a school should ensure that it satisfies.

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About the Author
Kristine Scott, Partner, Head of Education Sector and Cheltenham Office

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