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Lockdown III: Partial Closure of Schools and the Furlough Scheme

12 January 2021

A new year and a new lockdown…

On 4 January 2021, the Prime Minister announced a third national lockdown in England and that all schools had to partially close from 5 January and offer remote learning until at least the February half term. Only vulnerable children and the children of critical workers are allowed to attend schools for face-to-face learning, although early years settings (such as nurseries) remain accessible.

As a result, schools will need to give consideration to their staffing requirements over the coming weeks and may need to furlough certain employees (particularly support staff) either on a full or part-time basis.

Most schools will now be familiar with the furlough scheme having utilised it at some point since the initial outbreak of the Covid-19 pandemic. However, this note provides a quick reminder of the current scheme details. It is correct at the time of writing on 11 January 2021.

Key scheme details

  • The extended Coronavirus Job Retention Scheme (the “CJRS”) is currently set to run until the end of April 2021 to support businesses and individuals who are impacted by the disruption caused by the pandemic.
  • The Government will pay up to 80% of an employee’s normal pay for hours not worked (subject to a cap of £2,500 per month). Employers are not required to contribute to the wage costs for hours not worked but they are responsible for employers’ National Insurance contributions (“NICs”) and pension contributions and can “top up” employee wages above the CJRS grant at their own expense, if they wish to do so. Previous plans to review the Government’s contribution to employee wage costs in January 2021 have been withdrawn. We understand that the next phase of the plan to tackle the economic impact of the pandemic will be revealed in the Budget, currently scheduled to be held on 3 March 2021.
  • Employers have the flexibility to “fully furlough” employees (this means that the employee will not perform any work for the employer whilst furloughed) or make use of a “flexible furlough” arrangement (this means that an employee can work for any amount of time or shift pattern which can vary from week to week by agreement).
  • When working during a period of flexible furlough, employees should be paid their “normal” wage. Employers are responsible for paying the employee for those hours, subject to tax and NICs. Employers then receive a furlough grant for the remainder of an employee’s usual working hours. The applicable cap on the furlough grant will be proportional to the hours not worked.
  • There is no minimum furlough period (unlike when the CJRS was originally introduced). However, employers are required to report and claim for a period of 7 calendar days at a time, unless otherwise specified in the Government guidance.
  • In terms of eligibility, employers and employees do not need to have used the CJRS previously. Employers can claim for employees who were employed and on their PAYE payroll on 30 October 2020 (i.e. a Real Time Information submission notifying payment for that employee to HMRC must have been made before the deadline).
  • There is no maximum number of employees that employers can claim for under the extended CJRS.
  • Furlough arrangements need to be confirmed in writing. Although the Government guidance provides that employers do not require the written agreement of each employee to the proposed change in their contractual terms, as a matter of good practice, and to mitigate the risk of potential employment law and/or breach of contract claims, we recommend that the written agreement of each employee is sought. A written record of the agreement must be retained for a period of 5 years.
  • Where flexible furlough is being used, there are additional record keeping requirements and employers are required to retain (for 6 years) records of the “usual” hours worked by each employee (including details of the calculation used to ascertain usual hours) and the actual hours worked.
  • Employees can (but don’t have to) be furloughed if their health has been affected by Covid-19 or any other conditions, including if they are unable to work from home, or are working reduced hours, because they:
  • are clinically extremely vulnerable, or at the highest risk of severe illness from coronavirus and following public health guidance; or
  • have caring responsibilities resulting from coronavirus (such as caring for children who are at home as a result of school and childcare facilities closing, or caring for a vulnerable individual in their household).
  • When “furloughed”, employees cannot perform any work for their employer that generates income or provides a service, but they can take part in training; volunteer for another employer or organisation; or work for another employer (if contractually permitted to do so).
  • Claims for any calendar month must be submitted by day 14 or 15 of the following month.
  • For claim periods starting on or after 1 December 2020, employers cannot claim for any days during which a furloughed employee is serving a contractual or statutory notice period.
  • From February 2021, HMRC will publish the names of companies and LLPs who claim for periods starting on or after 1 December 2020, together with an indication of the value of the claim (within a banded range). HMRC will also be sharing with furloughed employees the full details of claims made for them starting on or after 1 December 2020. This will be done via the employee’s Personal Tax Account on Gov.uk.

Key documents and guidance

Schools should familiarise themselves with the furlough guidance which can be found on the HMRC documents page. Links to the key documents are listed below:

Considerations for schools

Can schools make use of the furlough scheme during their partial closure?

Yes, provided they meet the relevant eligibility criteria (as set out above).

Schools may wish to fully furlough certain staff (for example, those who are unable to work from home or where there is no work available). For others, where there is a reduced demand, a flexible furlough arrangement may be more appropriate. This may apply to staff working from home as well as those supporting the face-to-face learning provision on site.

Can teaching staff be furloughed during this period?

It is recognised that most (if not all) teaching staff will continue to work during the partial closure of schools, either to facilitate remote learning or support the face-to-face tuition of vulnerable children and those of critical workers. That said, there may be circumstances where a furlough arrangement is required, for example, if a teacher is clinically extremely vulnerable or has childcare responsibilities. Schools are strongly encouraged to seek advice if considering this as an option.

What should schools do now?

We recommend that schools remind themselves of the details of the extended CJRS and consider which, if any, employees could be furloughed. Schools can then make contact with staff to seek their agreement to a period of furlough leave or a flexible furlough arrangement. As noted above, furlough arrangements will need to be confirmed in writing.

Please do get in touch if you have any specific queries.

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