Can contractors with public sector engagements and who are in scope (deemed employment) for IR35 purposes be furloughed?
Contractors working for public sector organisations who are deemed employees for IR35 purposes may be eligible to be furloughed provided they are paid via PAYE. In this scenario the agreement to furlough would be made between the contractor’s personal service company (PSC) and the fee payer (usually the agency). The parties would agree that the contractor will carry out no work for the public sector organisation while furloughed and the fee payer would apply for the grant.
At the moment the guidance states that in order to be eligible a claim for furlough must have to have been submitted by 31 July 2020 for a period of 3 weeks between 1 March and 30 June 2020.
Related FAQs
Employees on Flexible Furlough can engage in training during hours which you record your employee as being on furlough, as long as in undertaking the training the employee does not provide services to, or generate revenue for, or on behalf of their organisation or a linked or associated organisation.
Where training is undertaken by furloughed employees during hours which you record your employee as being on furlough, at the request of their employer, they are entitled to be paid at least their appropriate national minimum wage for this time.
As the project progresses, it is important to continually monitor the contractor’s performance. Any one or more of the items below can be early warning signs that the contractor is in financial difficulty, and that further actions may be necessary:
- Decrease in labour or contractor’s personnel on site, and/or rapid turnover of contractor’s personnel
- Slowdown in progress on site
- Plant, equipment or materials suddenly disappearing from site for no apparent reason – unpaid subcontractors may unilaterally decide to remove items from site regardless of their contractual rights to do so
- An increasing number of defects and reduction in the quality of the contractor’s work
- The contractor seeking changes in the payment arrangements, and in particular early payments
- The contractor making spurious claims or contra charges
- The contractor seeking assignment of its benefit of the building contract
- Late filing of accounts by the contractor at Companies House
- Unsatisfied court judgements against the contractor
- Subcontractors and suppliers not being paid or being paid late
- Rumours in the press, in the industry, on site or elsewhere regarding the solvency of the contractor
- Unusual visits to site, for example from the contractor’s senior management or other personnel who had not previously been present or are not expected to be present
- Increasingly aggressive behaviour by the contractor
- The contractor’s parent company or another company within the contractor’s group displaying any of the above signs
Government guidance is that public transport should be avoided wherever possible. Transport providers will be expected to follow government guidance to make their services more COVID-19 secure.
The current situation with the coronavirus pandemic has presented obvious challenges to the effective and fair operation of the Court of Protection (COP). Remote access to the COP has therefore become a necessity to ensure that hearings continue to provide proper access to justice. All parties involved in such cases have a responsibility in achieving this primary aim.
The guidance is helpful and is likely to be useful to businesses as they seek to respond to the crisis and to restart their business activities as lockdown is eased. However, there remain outstanding questions. For example, can collaboration to prevent widespread insolvencies be viewed as in the interest of consumers? Businesses need to remain aware of the extremely high stakes involved in relation to competition law. Businesses contemplating collaboration with competitors should take legal advice before doing so.