Furloughing and Volunteering

March 28, 2020

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With Charities and Third Sector Organisations being made up for long serving staff and volunteers, it might seem that furloughing staff and getting them back as volunteers would be a great way accessing the funding whilst not losing valuable time in supporting the individual users/beneficiaries of the services. 

Sadly, it is not that simple!

Firstly, what is furloughing?

Furloughing is not a technical or legal term, it is merely a phrase the government has chosen to describe the actions organisations will take with their employees.

Furloughing a member of staff means the government will provide a contribution towards the employer of 80% of the costs of employing that individual subject to a cap of £2,500.

When an employee is furloughed they remain on the payroll.

You do not have to top up the extra 20%.  Some charities have decided to do this though.  As admirable as that is, careful consideration must be given to whether such actions are actually the right thing to do and trustees do not breach any of the requirements placed upon them to act in the best interest of the charity and its objects.  Trustees must be certain that the charity can also afford to do this.

Whether an employee can be initially furloughed will depend on whether there is either a contractual right to reduce their working hours and pay, such as a temporary lay off, or whether (in the absence of that) an employee agrees to it. 

Herein lies a dilemma though.  Employees in third sector organisations often have different motivating factors for doing what they do.  In a charity, an employee is unlikely to be happy to stay at home and receive most of their salary, they will want to be back at their place of work helping the users/beneficiaries of their charity.

So, they are unlikely to agree, unless of course they know this is the only choice to save the charity. 

Whilst a furloughed employee is off, the employee cannot do any tasks for their employer, or can they?

Can furloughed employees volunteer for you?

The scheme does not allow furloughed employees to carry out any tasks (work) for their employer except for training. They can also volunteer. 

But, volunteering is only permitted where individuals are “not providing a service to their employer”.  So a furloughed employee cannot go back and volunteer for its employer.

What would therefore appear to be an ideal solution is blocked by the terms of the scheme.

How can this be?  Surely there must be a carve out for charities who rely upon volunteers to function effectively?

Sadly, the answer is no.  But, don’t despair.  There are creative solutions:

Charities can swap staff to volunteer for each other;

If one person in a family is currently a homemaker, that person can swap roles with the furloughed employee;

Plenty of commercial organisations will also have furloughed employees, who might be looking for an opportunity to give something back in this time of all pulling together.

But, this will not always be completely straightforward and matters such as safeguarding and DBS checks, amongst others, will need to be carefully considered.  Recruiting an army of volunteers may not be completely straightforward, but it is doable with hard work.

Can all Third Sector Organisations qualify?

All UK-wide employers with a PAYE scheme are eligible for the Coronavirus Job Retention Scheme, this includes the public sector and charities. Employees can be on any type of contract, including zero-hour or temporary. If the funding for an organisation comes from a number of sources a judgement needs to be made on what that funding is for. If public sector funding explicitly covers staffing costs, then the money still exists to pay for staff and there is no need to furlough. If it does not cover staffing costs the organisation can furlough. Responsibility for that decision lies with the Accounting Officer of the organisation who pays the public funds so that they are clear there is no duplication.

Kevin Lucas
Charity Recovery Specialist and Licensed Insolvency Practitioner
Kevin has worked in the Business Insolvency and Recovery field since 2002 and now specialises in helping charities with financial difficulties. Contact him directly on kevin@lucasjohnson.co.uk.