Coronavirus Job Retention Scheme Extension - Furlough Update for Academies and Maintained Schools

Whilst the furlough scheme cannot be used where academies are in receipt of public funding, academies and schools can access the extended furlough Scheme for staff costs funded by private income streams, for example for before-and after-school club staff or some nursery staff.

On 5 November it was announced that the Scheme would be extended to 31 March 2021. Employers will be able to claim a grant back up to 80% of an eligible employee's reference pay, subject to a cap of £2,500. A review will be carried out in January 2021 to decide whether economic circumstances are improving to the extent that employers will be asked to contribute more towards the cost.

Much of the structure of the Scheme remains the same however, we have set out some of the key changes and points to note below.

Updated guidance on calculating and making claims has been released and the legal framework for the Scheme has also been issued in the form of a new Treasury Direction.

Eligibility

• Schools do not need to have used the Scheme before to be eligible to claim a grant under the extended scheme, and there are no limits of the number of employees that can be claimed for.
  
  
• You can claim for employees who were employed on 30 October 2020, as long as a PAYE real time information (RTI) submission was made to HMRC between 20 March 2020 and 30 October 2020.
  
  
• It is possible to re-employ and claim for employees who have been made redundant or stopped working for the school, provided that this employee was still on the payroll on 23 September 2020.

Serving Notice

• It is clear that from 1 December 2020, employers cannot claim under the extended Scheme for any period when the employee is serving notice.

Furlough Agreements

In order to make a claim under the extended Scheme, there must be a furlough agreement in place before the beginning of the period to which the claim relates.

By way of a reminder, agreements:

• can be made by means of a collective agreement
• must be made or confirmed in writing
• must be retained for at least 5 years

When Claims Can Be Made

Without reasonable excuse the deadline for making claims are:

• 29 December 2020 in relation to the November 2020 Scheme extension calendar month
• 28 January 2021 in relation to the December 2020 Scheme extension calendar month
• 1 March 2021 in relation to the January 2021 Scheme extension calendar month

Pay Reference Periods

When calculating how much to claim under the Scheme, staff who were employed by 20th March should refer back to the previous reference salary. There are new pay reference periods for employees who started their employment between 20 March and 30 October 2020 as follows:

• For hours and salary that do not vary - their reference period will be the last pay period ending on or before 30 October 2020. These employees will only be eligible for periods starting on or after 1 November 2020.
  
  
• For variable hours - the calculation for the average number of hours worked will be the average hours worked from 6 April 2020 and up to the employee's first day spent on furlough on or after 1 November 2020.
  
  
• For variable pay - the calculation will require the average wages that were payable between 6 April 2020 (or the date their employment started if after this) and the day before they are furloughed on or after 1 November 2020.

Because the Scheme has been extended, the Job Support Scheme (JSS) has been postponed and it is not known when/if this will start. The Job Retention Bonus will not be paid in February 2021 as previously thought. We will provide further updates if the guidance changes.

How the Scheme Applies to Academies and Maintained Schools

The updated guidance states that, "If you have staff costs that are publicly funded (even if you’re not in the public sector), you should use that money to continue paying your staff, and not furlough your staff."

As we have previously reported, where academies and maintained schools employ staff and the cost is covered by government funding, these staff cannot be furloughed. However, schools should be able to use furlough for staff whose pay is not met by government funding and who are not needed in the short term due to coronavirus. This continues to apply for the extended Scheme.

Should you require any further advice in relation to the above matters or other employment issues arising out of the current situation, please contact Alice Reeve in our Employment Law team on 07741 271363, or complete the form below.