I’m a full-time temp but my agency won’t furlough me: What can I do?

I work for a recruitment agency which places people in temporary positions, one after the other. 

While the model is risky in that no work means no pay, work has always been available and this system works for me.

My last assignment as a personal assistant to the CEO of a business firm began in October 2019 and came to an end on 21 February when the company hired a permanent employee. I was given one week’s notice – which is normal in this line of work.  

However, the agency has been unable to place me ever since and the search has now come to a complete stop  – which I think is a direct result of the situation around Covid-19 worsening.

As this means I have no income I have asked to be furloughed but they are claiming the reason for no work is not related to the coronavirus, and therefore I am not eligible. I don’t think this is right. 

I am trying to argue that my final salary was paid on 6 March, and from my understanding after reading guidance from the government website, I can be furloughed if I was employed and on the payroll as of 28 February 2020.   

I am now left without an income though I am still technically employed by the agency. Please can you clarify and confirm whether I am entitled to be included in this scheme?

Jayna Rana, of This is Money, replies: The coronavirus pandemic has created numerous challenges for both employers and employees across Britain.

In response, the Government has provided assistance where it can, including through grants, loans and the Coronavirus Job Retention Scheme which allows firms to furlough their staff. 

Your situation is unique in that you work for an agency under a zero-hour type contract, meaning if there is no work, you have no income.

According to the latest figures available from the Office for National Statistics, there were 974,000 Brits on zero hour contracts in December 2019 – a record high. 

Your last position – which you were placed in by the agency which employs you – came to an end on 21 February. This is before the 28 February, which is the date from which the Government has stated employees who were made redundant or stopped working can be re-hired and put on furlough. 

That said, because you were still on the payroll in March, it may be possible to argue that this applies to you.  

This is Money spoke to two employment experts to find out what the legal position might be for you and whether you can be furloughed.

Clare Gilroy-Scott, a partner in the employment team at London law firm Goodman Derrick LLP, said: There is no requirement under the coronavirus job retention scheme for a worker to have been working on 28 February 2020. 

The requirement is that the worker must have been on the recruitment agency’s payroll on or before 19 March 2020 and that it must have made a real time information submission notifying HMRC of a payment in respect of that worker on or before 19 March 2020. 

Normally an agency worker will remain ‘on the books’ – ie. on the payroll – until the agency issues a P45 and notifies HMRC so it is possible that you are still on the payroll, despite not being on a live assignment on that date.

The guidance on gov.uk does not state that an agency worker has to have been working on an assignment on any particular date. Indeed, the purpose of the cut-off date appears to be to prevent employers adding employees to the payroll after 19 March and then putting them on furlough in order to claim the grant.

The Treasury Guidance to HMRC of 15 April 2020 indicates that the scheme will cover employment costs relating to an employee ‘to whom the employer made a payment of earnings in the tax year 2019-20 which is shown in a return under Schedule A1 to the PAYE Regulations that is made on or before a day that is a relevant coronavirus job retention scheme day (either 28 February or 19 March) and, in relation to whom the employer had not reported a date of cessation of employment on or before that date’ if they are furloughed. 

Again, there is no express requirement for the employee to have actually worked in an assignment on 28 February, simply that they had been on the payroll and the employer had not reported to HMRC that the employee was no longer on the payroll.

Can zero-hour contract workers be furloughed? 

Those on zero-hour contracts are also eligible employees under the coronavirus job retention scheme and again, do not have to have been actually working on 28 February. 

Unless it was your employer’s practice to take you on and off the payroll in respect of each period of work, you may well have been on the payroll at the relevant time and therefore eligible for furlough.

Why won’t your agency furlough you? 

There are a number of costs to a business in furloughing an employee. Direct costs include holiday pay, national insurance and apprenticeship levy costs. 

Holiday entitlement will accrue during furlough and holiday taken must be paid at the normal rate of pay (or, where pay varies, paid at the average pay received by the employee over the previous 52 working weeks) so the employer will have to ‘top up’ the 80 per cent contribution received through the coronavirus job retention scheme. 

There will be employers’ national insurance contributions to be paid on the topped up holiday pay as these are not covered under the scheme. On a normal assignment, the agency would receive a fee from the client to cover such costs but there will be no fee during furlough. 

Other costs may include the administrative burden of making the claims under the scheme in respect of each agency worker on the payroll.

With permanent and directly engaged employees, these costs are generally outweighed by the value of the grant received. 

The difficulty with agency workers and zero-hours workers, is that the employer would not normally have to pay them at all when not on assignment or not working.

Chris Weaver, senior associate at law firm Payne Hicks Beach, adds: Agency workers are eligible to be furloughed like other employees, if they are paid through PAYE.  

However, it should be remembered that it is the employer who decides which employees (if any) to place on furlough leave. Even if certain ex-employees are eligible to be rehired and furloughed, the employer is under no legal obligation to do so. 

Can I ask my employer to furlough me? 

An employee can request to be put on furlough leave, but the employer does not have to agree.

The Government has stated that the purpose of the coronavirus job retention scheme is to reimburse employers for the costs associated with the furloughing of employees arising from the health, social and economic emergency resulting from coronavirus. 

This requires some connection between the consequences of the coronavirus crisis on the employer’s business and the need to furlough employees. 

It is not clear how this purpose would be met where an employee is rehired solely to allow them to be furloughed and access funds from the scheme.

Although arguably the fact there are no jobs to place you on currently is because of the current crisis, the fact the agency has taken the view that there is no work is unconnected to coronavirus is also problematic as, ultimately, it is for the agency to decide whether to furlough.