"Furlough Scheme Doesn't Cover Our Profits!"

David_Isaac_Lewis

Dear MSE Community, 
My employers are holding back applying to furlough many supply teachers and agency workers as they are waiting for government to agree to: 

1)      Cover any margins retained by the umbrella organisation. (There are still a number of unanswered questions in the guidance around discretionary bonuses within the employment contract and this means we are still unclear if we calculated on a variable rate, that we would receive all of that rate back through the furlough scheme.)

2)      Whilst the unions are suggesting that the umbrella company could choose not to process holiday pay, the guidance updated on the 17th April is very clear this is not optional. The guidance explains whilst you can agree to vary holiday pay entitlement as part of the furlough agreement, that most workers are entitled to 5.6 week of statutory paid annual leave each year which they cannot go below.

The agency aren't saying they won't apply but are putting the onus on the government if they 'can't get what they want' for themselves. By holding the furlough scheme to ransom like this, they are brining ever increasing uncertainty to families who have, up until recently, held off applying to Universal Credit as we all fall within the government safety net of the furlough scheme. Therefore they have missed out on weeks of Universal Credit payments. 

I understand that there is no legal obligation for companies to furlough their staff but I believe there is a moral one. 

Is it right when other umbrella agency companies have already successfully applied to the furlough scheme? 

If there is no legal case against them is there at least a moral one I can bring forward? 

Please help? Perhaps I am missing something and it is the furlough scheme and the government who aren't being helpful right now? 

David. 

 

Fire_Fox

As I understand it, Universal Credit and the furlough scheme are not mutually exclusive. People can be in receipt of both, depending on household circumstances, income, etc.

Since the employer has not decided to or has not agreed to furlough staff you can apply for UC, then HMRC informs the DWP if/ when furlough payments come through. As a 'back up' you can inform the DWP online yourself.

poppy12345

Fire_Fox said:

As I understand it, Universal Credit and the furlough scheme are not mutually exclusive. People can be in receipt of both, depending on household circumstances, income, etc.

Providing they don't have savings/capital of more than £16,000 otherwise they will be excluded.

Also claiming UC will end any tax credits they may already be claiming.

daKlone

The FCSA have been working on this for some time, but it seems that the Govt. position has not yet changed. I think Martin is talking to them about it but I'm not 100% sure.

There are in fact four main issues:

1) The way your payment would be worked out. Currently, most agency/UC employees would only get 80% of minimum wage because 'bonuses' and 'commission' are excluded;
2) Agencies/UC still have to accrue (and pay) holiday for each week you are furloughed, which they don't get from the Govt.;
3) Agencies/UC still have to pay the Aprenticeship Levy, which they don't get back from the Govt.;
4) Agencies/UC still have overheads (for running payroll etc), which they don't get back from the Govt.

Unless these issues are addressed, I can't see any agency/UC employees being furloughed.

I have emailed my MP about it, but got nothing more than a boilerplate reply explaining how CJRS works. I've been trying to get a response from Martin, Rishi Sunak or the Treasury, but to no avail. I can only suggest you try too and maybe if enough people bring it up, something will happen.

David_Isaac_Lewis

Thanks - this is the most helpful explanation yet. I am still uncertain to why some agencies under umbrella companies have managed to furlough their employees  and apply to furlough scheme and mine has not yet. 

How are other agencies/ umbrella companies already accessing the furlough scheme if what your saying is this case? 

I do completely understand and believe it is the case by the way - I’m just interested in why it’s different for other companies...

daKlone

I've not actually heard of any at all; do you have any examples of agencies/UC that have furloughed employees?

sharpe106

David_Isaac_Lewis said:

How are other agencies/ umbrella companies already accessing the furlough scheme if what your saying is this case? 

They can access it they just need to be willing to pay the costs. Which most are not. 

David_Isaac_Lewis

Two supply teachers from another recruitment agency called i4 (London) have been furloughed already. I was skeptical myself but they assured me they are already getting furlough payments. 

daKlone

That's interesting David.

Looking at their website, I note that they are not members of any of the industry organisations such as the FCSA or REC. I wonder if this has anything to do with it? I know that they have issued legal guidance to their members that highlights the costs and risks for agencies/UCs when furloughing so perhaps this company are unaware....or perhaps they have taken the decision to absorb the costs and risks themselves.

Out of interest, is your agency/UC a member of any of the industry organisations David?

Anyway, I'm glad to hear of any agency/UC employee who is getting furloughed

David_Isaac_Lewis

Cheers daKlone for checking that out! I thought that might be the case. 

Yes JSA group fall under the FCSA.

I think that my union might be taking my case to a national level to represent all supply/ agency workers not being put on furlough. 

As far as my union are concerned there is government money available to support workers who would have otherwise had work. Therefore it is immoral for the FCSA to use employees as collateral in there negotiations to ask government to continue covering the additional costs and profits they would usually receive. 

Surely the FCSA can apply to the business loans available to cover any financial gaps they might have by furloughing?

I still don’t fully understand why FCSA won’t apply to the scheme on our behalf.
Surely they could find a way if they wanted to?

Anyway thanks for your help and information- I get it’s not as straightforward as I originally thought it might be. However I do get a strong sense that there is some greedy politics behind the FCSA ‘logic’.

daKlone

Hmm, I don't know if I would go as far as to call it 'immoral', as business and morality are (in the most part) mutually exclusive in my experience.

Just to be clear; the FCSA are not employers and are just an industry body so it would be down to individual businesses to furlough or not. However, I believe that members of such organisations are relying on them to provide guidance in this area.