1/ Furlough Leave and TUPE - a thread...
An important question: if somebody TUPEs into a business after 28 Feb (but has continuity from before then), can the new employer claim 80% of salary under the Job Retention Scheme?
An important question: if somebody TUPEs into a business after 28 Feb (but has continuity from before then), can the new employer claim 80% of salary under the Job Retention Scheme?
2/ My view is 'no'. It's a loophole, and something the government plainly hasn't considered. And it's an odd result. But nevertheless, this is why I think 'no'...
3/ TUPE operates to transfer all 'rights, duties, powers and liabilities' under the employment contract, but only as between employee and employer - not third parties. That is why there are special provisions in TUPE to transfer collective agreements.
4/ Furlough leave is a matter between HMRC and the employer - not between the employer and employee.
5/ TUPE does not 'transfer' furlough leave. It may transfer continuity of employment, but that doesn't mean the employee was on the employer's payroll scheme as at 28 Feb.
6/ Supporting that, the transferor does not have the right to obtain the payroll data from the transferee that HMRC would require (including for employees without normal working hours, where you average pay between 6/4/19 and 5/4/20).
7/ So although the result is odd, I think that is more likely to be the correct answer.
8/ I have been told that HMRC announced on a webinar that they would regard TUPEd employees as retaining earlier continuity and eligible for the job protection scheme.
9/ But that is hearsay and, in any event, a comment by some person doing a webinar is not really authoratitive guidance as to HMRC's official stance.
10/ So, if my 'first principles' analysis is wrong, some official guidance saying you will extend the furlough scheme to employees who TUPE in after 28 Feb would be nice, pretty please, Mr Taxman? [ENDS]
