To furlough, or not to furlough? A difficult question for many charities

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4 min read

Charities are eligible to benefit from the Coronavirus Job Retention Scheme. All UK employers that have created and started a PAYE scheme on 28 February are eligible. They must have a UK bank account and have enrolled for PAYE online.

Following some confusion in the sector around the ability of organisations receiving funding from a variety of sources, including public funding, to furlough staff, the guidance has now been updated to state that charities receiving public funding can still furlough staff under the Scheme in some circumstances:

“Where employers receive public funding for staff costs, and that funding is continuing, we expect employers to use that money to continue to pay staff in the usual fashion – and correspondingly not furlough them… In a small number of cases, for example where organisations are not primarily funded by the government and whose staff cannot be redeployed to assist with the coronavirus response, the scheme may be appropriate for some staff.”

Employees can normally only be furloughed, however, if they agree to be furloughed, as it amounts to a variation of their employment contracts (unless those contracts include a “lay-off” clause, which would be highly unusual in the charity sector).  A charity cannot just decide to furlough employees – it will need employees to take part in the furlough scheme voluntarily.

The minimum period for which an employee can be furloughed is three weeks. It is, however, permissible to furlough employees multiple times, which makes it possible to rotate periods of furlough among different groups of staff. This might be useful for some organisations.

Volunteering while on furlough

In a sector used to the voluntary principle, a common question amongst charities and their staff is whether charity employees can simply volunteer their services while on furlough. The answer is a qualified yes – it seems that charity employees can volunteer while furloughed, but not for their own employer.

The guidance for employers as it stands at present states that furloughed employees cannot not provide services to or generate revenue for, or on behalf of, their employing organisation. The employer can, however, agree “to find furloughed employees new work or volunteering opportunities whilst on furlough if this is in line with public health guidance.”

The guidance for employees goes further in stating that employees can undertake training or volunteer subject to public health guidance, as long as they are not making money for or providing services to your employer or a company linked or associated to your employer.

The guidance would therefore seem to prevent an employee doing volunteer work either for the employing charity, whether in their normal role or any other role within the charity, or for any company linked or associated with the employing charity.

This suggests, for example, the employee of a trading subsidiary of a charitable company would seem not to be able to be furloughed from their employment by the charity’s trading subsidiary, and then do voluntary work for the parent charitable company.

So, at present, a charity employee cannot be furloughed and then volunteer for their employer, and this may be a particular problem for some charities where charity employees also hold significant volunteering roles.

To end on a more positive note, however:

  • volunteering opportunities with another organisation “found” for furloughed staff by a charity employer, and
  • furlough swaps entered into independently by furloughed charity staff, such as those organised through organisations such as Time to Spare, or even more informally between two individuals,

should not, it seems, breach the guidance, provided such volunteering is in line with public health guidance and is not required in any way by the employer.  

But why can’t furloughed employees volunteer for their charity?

The Coronavirus Job Retention Scheme is not, unfortunately, designed to help charities with increasing demands on their services, but decreasing funding, as a result of the pandemic – only those that for financial reasons resulting from the Coronavirus need to reduce their activities, and so their staffing.

The Government does not intend for employers to be able to benefit twice under the Scheme – as an employer would, for example, by furloughing a member of staff so that it can access the Scheme’s funding, but then still obtaining services from that member of staff in a voluntary capacity. 

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