Does the Job Retention Scheme apply to casual workers?

1. The link below will take you to an amended version of written advice I gave yesterday to a client. It is amended in the sense that I have anonymised the client and removed details from the description of the facts that might enable the client to be recognised. It is otherwise unchanged. I am publishing my written advice in this form with that client’s permission.

2. The client in question engages thousands of ‘casual’ workers – I come on to discuss what I mean by that term at 4 below – and was exploring whether it might use the Job Retention Scheme to furlough those workers so that they have money to live on.

3. Although the advice is specific to that client – and I accept no responsibility to anyone else who acts upon it – it might very well have read across to all who “employ” – in the wide sense in which that word is used in the Treasury Direction – “casual” workers.

4. By “casual” workers I mean those who do not benefit from a commitment on the part of their employer to enage them for a minimum number of hours. If you are engaged by such an employer the advice is likely to extend to you (1) whether you are in the employment law sense a worker or an employee and (2) if you a zero hours contract worker (3) if you work for an agency or an umbrella company. If you benefit only from a contractual minimum number of hours the advice would suggest that your furloughed pay may be no more than that for the contractual minimum number of hours. If a considerable proportion of your income is made up of overtime then the advice suggests that your furloughed pay might be based only on your ‘basic’ wage or salary.

5. Employers engaging ‘casual’ workers can be very profitable but they tend to operate on thin margins. They will have no income from their clients in respect of any sum they pay to casual workers they choose to furlough that they cannot recover under the Job Retention Scheme. If they ‘overpay’ those workers – by which I mean pay more than they can recover under the Job Retention Scheme – that overpayment will be pure cost for them. And if they ‘underpay’ those workers – by which I mean pay less than the sum prescribed by paragraph 7 – they risk not being able to recover anything at all under the Job Retention Scheme. They are unlikely to have any financial incentive or reason to pay furloughed workers. They are, thus, in a difficult position: if they want to help they must take considerable financial risk without any financial reward.

6. My reason for publishing this advice is the hope that it might help persuade Treasury to amend its Direction so that employers of casual labour can do the right thing. Unless there is an amendment, it is a fact that thousands, or tens or hundreds of thousands, or even millions of casual workers, a class that is structurally vulnerable and likely to be most in need of financial support, is unlikely to be able to access this basic safety net. It seems to me perverse that the application of the Job Retention Scheme is most secure for those likely to need it least and least secure for those likely to need it most. It should go without saying that these are outcomes that I abhor but they seem to me to be the outcomes that the Direction delivers.

7. It goes without saying that I derive no benefit from publishing this advice. However, if you have found it useful, and you are in a position to do so, I hope you might consider supporting this case which seeks to ensure that a million of the most disadvantaged children in the country are able to access schooling.

Jolyon Maugham QC