I have been up most of the night looking - for a client who employs 000s - at the legal detail of the coronavirus job retention scheme. This, of course, is the scheme that is suppose to help those in employment. I have REAL concerns that it won't help the most vulnerable. THREAD.
The difficulties arise for, in particular, 'casual' workers: i.e. those who work intermittently, often through agencies, and/or those on Zero Hours Contracts. /1
Now the guidance that HMRC has published is pretty clear that they are within the scope of the CJRS (gov.uk/guidance/claim…).
But are they? /2
But are they? /2
The guidance is just that - guidance - and it is not the Scheme itself. The Scheme itself is to be found in a Treasury Direction which you can read here assets.publishing.service.gov.uk/government/upl… /3
Once you look at the detail of the scheme you can see quite a few difficulties for employers of those types of worker. For example, there is a huge and painful bear trap arising from the interrelationship of paragraphs 7.1(b) and 8.2. /4
This bear trap on its own is likely to stop most properly advised employers of casual workers of accessing the scheme. And you may not care about the position of the employers - but you should care about whether they open it up to employers. /5
But the real problem comes in paragraph 7.3.
As I read that paragraph, and here I synthesise its effect, any worker earning below £2,500 whose pay is conditional on being asked to do shifts (i.e. the very essence of casual labour) is, in effect, ineligible for the scheme. /6
As I read that paragraph, and here I synthesise its effect, any worker earning below £2,500 whose pay is conditional on being asked to do shifts (i.e. the very essence of casual labour) is, in effect, ineligible for the scheme. /6
You're not going to furlough casual workers - who of their very nature you have no ongoing commitment to - on 80% of pay unless you are in practical terms certain to get that money from Government - and get to keep it. /7
Remember, if you are an employer, even if Government pays you, the guidance (this time, rightly) makes clear that HMRC retains the right to audit you later. /8
I don't - in the case of the CJRS - want to be cynical about the intentions of Govt. But I don't understand why a well-advised employer of casual labour would use the CJRS otherwise than out of social beneficence (not a quality we commonly associate with such employers). /9
Final substantive point: I hear that those involved in the drafting of the CJRS are aware of the differences between the Guidance and the actual Treasury Direction.
Beware. /10
Beware. /10
Let's hope this problem can be sorted out - and quickly. The last thing, the very last thing, the most vulnerable category of workers needs is a bait and switch. /ENDS
