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Covid-19 and the death of the umbrella industry

There comes a point in life when you feel compelled to change something you know is wrong. I feel that way about the growing scourge of umbrella companies forced upon hard working people who have no choice if they want to work and get paid. You might be thinking it’s a little odd to find a post about umbrella companies on a photography blog, so let me start by telling you about myself and how I got here.

Teaching has always been a good career for me alongside my work as a photographer. It’s offered me reliable security against the increasingly precarious world of professional photography.

I started my teaching career at the University of the Arts in London (UAL) where I was lucky enough to land a job teaching photojournalism. Over the years, I completed my teacher training and expanded my specialism to also include filmmaking. I gained valuable experience working in schools, colleges, adult education and running my own workshops and training. I am proud to be a teacher and enjoy what I do. I am an investor in people. I invest in the future.

Following the creeping introduction of zero hour contracts in FE and all the problems they bring I decided to take up supply work as it offered plenty of work and allowed me the flexibility I needed for my photography.

The Covid-19 pandemic has left supply teachers and other contractors in dire straits following the decision by umbrella companies to furlough on 80% NATIONAL MINIMUM WAGE (NMW). In the worst case scenario some umbrella companies have flat refused to furlough at all leaving thousands of people in severe financial hardship.

Employment Structure

Anyone interested in working as a supply teacher will usually contact a specialist recruitment agency where they will go through the normal process of application, interview, proof of credentials, DBS check, form filling etc before being offered work. You’d be forgiven for thinking the recruitment agency is your employer – if only it was that simple. It really is a case of ‘buyer beware’ when you’re casually given a leaflet for an umbrella company and told to register so you can get paid.

Let’s start by looking at the employment structure of a teacher employed directly by a school. The structure is simple, you go to work and earn income directly for yourself. That may seem glaringly obvious but at this stage it is important to remind ourselves of the simplicity of that relationship.

When you are asked to register with an umbrella company (and remember, the only reason you will do this as a supply teacher is to get paid), the situation changes dramatically. You become a contractor working for the umbrella company and the money you earn is income for the umbrella company. The umbrella company will pay you as a contractor working for them according to their terms and conditions. Nobody bothers to explain precisely how that works so I’ve produced a diagram to help do that.

The complex web you get caught up in simply to get paid for working as a supply teacher or other contractor.

Umbrella companies have large pools of contractors covering different sectors of industry. Contractors fulfil assignments sourced by recruitment agencies; timesheets are recorded and submitted and the umbrella company will invoice the agency for sending you – their contractor to complete the assignment (yes, you’re working for them).

The odd thing about this entire set-up is that you, the contractor have no dealings or contact with the umbrella company other than payroll issues. It remains a silent, faceless partner – yet, is still your employer. Daily contact is maintained with the recruitment agency who will call, offer work and negotiate a day rate. It comes as a big surprise then to realise the convoluted and opaque relationship with the umbrella company and the way pay is calculated.

Pay Structure

The day rate agreed with the recruitment agency ceases to exist with the umbrella company. It is replaced with a new structure outlined in the contract of employment that splits pay into 2 components:

1. National Minimum Wage (NMW)

+

2. Discretionary Profit Share Bonus (DPSB)

The pay structure used by umbrella companies is morally corrupt. Given the choice, nobody would knowingly trade an agreed day rate for NATIONAL MINIMUM WAGE with the balance available as a DISCRETIONARY profit share bonus.

I cannot think of any other way to describe the deliberate manipulation of pay in this way other than ‘laundering.’ It is not ethical, it is not transparent, it is confusing, opaque and the contractors forced into this position would rather have a simpler, more equitable, honest process in place. It is this ‘laundering’ of a simple day rate that has led to supply teachers and other contractors being furloughed on 80% NMW, if at all.

Not only is the use of the word discretionary incorrect but the phrase, ‘profit sharing bonus’ is also highly misleading. You’d be forgiven for thinking it applies to some end of year company profits that are divided up and shared with contractors. This is not the case. It never happens. There is no profit sharing. The bonus element relates strictly to pay in excess of NMW. It is what is owed to you and obligatory.

The pay structure used by umbrella companies is morally corrupt. Given the choice, nobody would knowingly trade an agreed day rate for NATIONAL MINIMUM WAGE with the balance available as a DISCRETIONARY profit share bonus. Click To Tweet

Deductions

One of the biggest complaints about umbrella companies is the amount of deductions from wages. In a BBC investigation, one contractor said: “My payslip now looks like a shopping catalogue, there are so many procedures and deductions.”

None of it is transparent, none of it is easy to understand. There are more twists and turns than an Agatha Christie novel. Remember what I said earlier, when you sign-up with an umbrella company (simply to get paid),  you are actually signing-up to work for the umbrella company. You are an  employee – a contractor. The agency will pay the umbrella company for the work you’ve done. In effect, the umbrella company (I know, none of this happens in reality) has supplied a contractor – you to complete the assignment. Your agreed day rate ceases to exist, instead it is known as an assignment fee/ rate or company income – this is income for the umbrella company, their money, in the first instance. It is not your gross pay and that’s why umbrella companies can make the following numerous deductions from what started as a simple, agreed day rate.

  1. Employer’s National Insurance – 13.8%
  2. Holiday Pay – 12.07%
  3. Apprenticeship Levy 0.5%
  4. Margin – this could be a fixed fee as high as £25 a week or a percentage (possibly uncapped)
  5. Workplace pension 3%

Once these deductions have been made the remaining sum is further complicated by laundering it to NMW + discretionary profit share bonus. This is your gross pay sent to payroll where tax and employee NI deductions are made before arriving at the the money you receive, your net pay. Umbrella companies are not straightforward, easy to understand or logical. It’s no surprise then that so many people are left angry, frustrated and disappointed on pay day.

Umbrella companies like to talk about an uplift – an agreed, inflated day rate with the agency to account for the additional deductions. The truth is, an agency will add another tenner if you’re lucky, on an already low day rate which in no way accounts for all the deductions.

It’s not widely promoted by agencies or umbrella companies but there is a way of avoiding paying employment costs – by switching to PAYE payroll. The only deductions on your payslip should be holiday pay and personal tax and NI deductions…but there’s a sting. Because employment costs are passed on to the agency the already low day rate will sink even lower.

Holiday Pay & Pension

Umbrella companies and the FCSA would like you to believe you get holiday pay. Remember the day rate you negotiate with the agency, well when it gets paid to the umbrella it is ‘laundered’ to become their income. This allows the company to deduct 12.07% and pay it back to you as holiday pay. It’s a bit like me promising you a Christmas present and asking you to pay me 12.07% every week towards it. Hardly a Christmas present from me you’d agree.

The same thing applies to employer’s pension contributions. Yep, you guessed it, the money comes out of the day rate negotiated with the agency. The whole thing is smoke and mirrors – designed to deceive and treats contractors with contempt.

Coronavirus Job Retention Scheme

Six weeks after the government announced the Coronavirus Job Retention Scheme (CJRS) a fragmented situation continues to emerge. Some umbrella companies are refusing to furlough at all while others are only offering 80% NMW. Government guidance is clear, umbrella companies are part of the furlough scheme, calculation should include regular wages but discretionary bonus payments are excluded. It is the inclusion of the word ‘discretionary’ in contracts used by umbrella companies that has led to thousands of umbrella employees being reduced to NMW.

https://www.gov.uk/guidance/work-out-80-of-your-employees-wages-to-claim-through-the-coronavirus-job-retention-scheme

The Freelancer and Contractor Service Association (FCSA) led by Chief Executive, Julia Kermode which represents 55 umbrella companies with up to 650,000 umbrella employees continues to wait for clarity from HMRC. In her latest statement issued on 21 April, she writes, ‘since the Coronavirus Job Retention Scheme (CJRS) was announced by the government on 20 March 2020, the FCSA has come under scrutiny for the perceived failing of umbrella firms to access the coronavirus scheme for their workers.’

The first strategy the FCSA came up with was to produce a template letter which was sent to contractors to lobby MPs to allow discretionary bonuses to be included in the furlough scheme. It is astonishing to ask employees to sort out a mess created entirely by the industry through the continued and widespread use of unfair contracts.

Template letter produced by the industry to lobby MPs clearly states bonus is simply balance of money received from agencies.

What’s clear from the letter, any money above NMW is indeed the balance of funds originally agreed with the agency. So despite all the ‘laundering’ by the umbrella industry the money agreed with the agency is the money due to the contractor and NOT a bonus at all. There is nothing discretionary about it.

From a moral perspective it is absolutely unacceptable for an employer to deliberately reduce the pay of an employee to NMW with the remainder obfuscated to serve the employer’s interests (reduced liability) leaving the employee at a significant disadvantage; precisely the situation we find ourselves in now with the furlough scheme. It’s important to remember, the word discretionary in umbrella contracts always has had the potential for this.

On 30 April, the FCSA published an article warning about misleading “expert” advice. It states, ‘One such website asserts that they have received an answer from HMRC, which, in essence, suggests that contract terms of employment can be disregarded in order to consider which elements of pay should be included in furlough calculations.’

The article is referring to Martin Lewis who together with his team have been working tirelessly to help. Martin writes: ‘For the last couple of weeks, I’ve been in discussions with HMRC trying to see if there is a route through it, or if it’s possible to get the guidance changed to accommodate it. Sadly, I can’t see much prospect of that happening any time soon, however while at first the response was simply “it depends on the contract”, yesterday I got an agreed publishable, attributable written quote on it, which does help a touch. Now I can write that an HMRC spokesperson said:’

“Payments the employer is obliged to make to the employee should be included in the reference salary. Variable payments that are specified in a contract and are always paid in reality, can be included within the reference salary.

“The percentage does not have to be in the contract. The written terms of the employment contract are the starting point for assessing whether earnings paid by an employer are discretionary or not. Where the pay arrangements in practice clearly differ to those specified in the contract, the employer should consider the reality of the employment arrangements.”

https://www.moneysavingexpert.com/news/2020/04/employed-help-coronavirus-furlough/

The FCSA dismiss the statement claiming, ‘the quote is not actually attributed to anyone,’ despite the fact Martin clearly writes, ‘I got an agreed publishable, attributable written quote.’

What is the purpose of this deliberate attempt to mislead?

Why doesn’t the FCSA contact Martin to establish details and explore the possibility of moving forward?

The FCSA statement continues: ‘Furthermore, a number of FCSA members report being contacted by their employees who are quoting various sources of inaccurate advice and incorrect interpretations of the law.’

Well, I’ve been in touch with Max Winthrop, Chair of the Law Society Employment Law Committee and Head of Employment at Newcastle firm Short Richardson and Forth who very kindly has agreed to look at a number of umbrella contracts. He states, ‘I still think that “discretionary” is being used here incorrectly. If you were paid on NMW rates, but at the end of the year the company’s profit was divvied up and, for example, 20% paid out to employees or not at the complete discretion of the company that’s what a court of tribunal would recognise as “discretionary”. Such terms are not unusual.

However, if you get paid more for the work you do when on assignments, and you always get paid such extras, you could put the word “discretionary” in your contract in neon letters, but that isn’t a discretionary payment.’

Julia Kermode was interviewed on BBC Radio 4, Money Box programme on 25 April and admitted the word discretionary is problematic but maintained it was necessary for continuity of employment. This is not correct. Paul Lewis, presenter of Money Box got it right when he described NMW + discretionary bonus as a ‘bizarre’ and ‘daft’ way to pay people.

Terry Hillier, Chief Executive of People Group Services was also interviewed on the same programme. His company has furloughed 4,500 people on 80% take home pay since April 03. People Group contracts do not contain the word discretionary so had no problem using the government furlough scheme. They still offer flexibility and continuity of service.

Money Box: https://www.bbc.co.uk/sounds/play/m000hmy3

I’ve been in touch with Terry and asked him why the word ‘discretionary’ was no longer used in People Group contracts? He told me it was no longer needed as the term referred to expenses claims when they were allowed. It has absolutely nothing to do with the balance of pay in excess of NMW which is entirely obligatory.

It appears the word discretionary also has got nothing to do with flexibility or continuity of employment. To meet the rules for ‘continuous’ employment, an umbrella company must pay you for 336 hours of work per year at the minimum wage.

Terry Hillier explains why the word ‘discretionary’ was used in umbrella contracts.

Terry Hillier’s spot on Money Box is quite short. It’s worth pulling up a chair and giving 20 mins of your time to listen to his in-depth interview about the umbrella crisis. I don’t know Terry personally but he seems a decent guy and not afraid to discuss the industry including what’s wrong. For easy navigation, timings and topics are listed below.

  • 1:37 How will I live without money?
  • 2:16 What did you do?
  • 5:15 What is the industry feedback?
  • 6:58 Lack of action by umbrellas
  • 8:17 National Minimum Wage v Total Earnings
  • 9:56 What impact will this have on the industry?
  • 12:20 Will this affect which umbrellas/ agencies partner with?
  • 14:59 Wellbeing of contractors
  • 16:10 What feedback have you had from contractors?
  • 19:03 What do you think will happen to the industry in the future?

“We did this because it’s a longer game – we knew we had to help our contractors and our agencies and our hirers. It was as simple as that. It is risk and reward. We do the right thing, even when there are some grey areas, but we help people survive. When we come out the other side, we’ll still have clients wanting to work with us. And the bottom line is I want to ensure our contractors have sufficient finance to survive.”

Terry Hillier, Chief Executive People Group Services

Since the introduction of IR35 Intermediaries Legislation, supply teachers and other temporary workers have been left to the mercy of umbrella companies. The industry hasn’t had great press; reports of exploitation and rip-off being common as well as off-shore registration and tax avoidance. The irony is Gordon Brown introduced the legislation in 2000 to prevent contractors, consultants and freelancers paying less tax and national insurance via their own limited company than if they were employed directly by their end client or agency. It was a strategy to stop tax avoidance. I guess it’s easier to go after ordinary people who don’t have access to expensive lawyers and accountants than large corporations and foreign jurisdictions.

In 2017, MPs agreed to investigate umbrella companies following a BBC investigation into exploitation but nothing changed. Now, the Covid-19 pandemic has put umbrella companies firmly under the spotlight again. Social media is awash with complaints – people are genuinely worried how they are going to survive.

Louise, a single parent still waiting to be furloughed writes: ‘I feel incredibly let down, ignored and devalued by my employer, an umbrella company. Since the school closures on 27th March, we have been given very little information and virtually no reassurance that we will be furloughed by the CEO.  He continues to state that he wants to furlough his staff but there has been no action or actual substance to this for weeks.  

It’s been over four weeks now of unbearable uncertainty, no money and life would of course feel completely different if  we were being furloughed on our actual salary.  I was earning £588 a week as a highly experienced secondary SEN teacher, to be offered 80% of NMW is in my view both immoral and an insult to my professional status.  

The daily mental stress and anxiety it’s causing me is at times is unbearable.  I am a lone parent, I have no savings, no income and no outside financial support.  I have been forced to apply for UC but receive no payment until 07/05.  This, in my opinion is completely unnecessary when companies are being financially supported by the government to furlough employees.  Umbrella companies should be held accountable for their blatant neglect and mistreatment of their hardworking, professional employees.’

Another supply teacher, Turquoiselady: I am a Primary Supply Teacher, (20 years teaching experience), who undertakes mainly short-term and day-to-day work. I am hired through an agency (Supply Desk) but paid via an umbrella company (JSA). My experience with the UC during the Covid 19 crisis has been, and continues to be, woeful. Virtually all of the communications I have had with them, have been instigated by myself and their responses have always been generic and vague. Despite having named contacts, it has proven difficult to illicit even those responses. 

To summarise, my current situation (24/04), the UC are unwilling to furlough staff, until there is clarification of whether pay should be 80% of NMW or gross pay. There is also a issue regarding inclusion/exclusion of holiday pay.

In my four years as a Supply Teacher, I have never received a payslip detailing payment as NMW plus discretionary bonuses – all my payslips show a daily rate (agreed with my agency) plus itemisation of employment and employee costs (NI, tax, pension). Until this crisis, I was unaware that we were actually paid NMW plus bonuses, not the agreed agency daily rate. 

It is now 5 weeks since schools were closed, and, as a consequence, 5 weeks without any income. I am currently living off savings I have scrimped away for retirement and, due to my prudence, am unable to claim Universal Credit etc. With hindsight, I wish I’d blown the lot on a long overdue (eight years!) holiday. 

It’s over a week since my last email from JSA. It is an understatement to say that I feel neglected by the UC AND the agency, both of whom have profited from me. Once normality resumes, I will refuse to work for any agency that uses UC, or has been shown to have treated supply staff unfairly during this difficult time.

And it’s not just supply teachers impacted by this crisis. Paula who works at an advertising agency wrote: I worked on a fixed day rate, based on a five day week, 40-hour week contract. I used Brookson Umbrella because I wanted to ensure my tax was sorted properly. Like many other umbrella employees, I had no idea that they divided my pay into National Minimum Wage and a ‘discretionary bonus’ until I applied for furlough. This doesn’t make sense to me, as it was never how the agency organised my work. Due to this, I face receiving a fraction of my actual pay – 80% of National Minimum Wage, which will not even cover my bills let alone housing costs or living expenses and has no bearing on my actual earnings.

I’ve repeatedly asked Brookson to reconsider their stance, citing other umbrellas that have decided to furlough on full pay, as well as MPs and financial experts who have recommended they interpret the guidance in this way, but they have refused. Frustrated, I asked their CEO why they have made this decision on Twitter and he immediately blocked me. Umbrellas have profited hugely off this system and now are turning their backs on employees during a crisis.’

The UK claims to have comprehensive employment laws to protect workers but it appears thousands of umbrella employees have been forgotten. It makes no sense that successive governments keen to talk about ending poverty fail to notice or even comprehend the immiserating and obfuscating mechanisms used by umbrella companies.

It may be a political triumph to introduce NMW but it’s no panacea to end poverty. It serves politicians and industry to be seen to be doing the right thing but let’s not lose sight of what it actually is – a ‘minimum’ consigning thousands to professional slavery. Five in every six people in low-paid work fail to escape low pay over 10 years.

People on NMW struggle to survive. There is no break from poverty, no holidays, no gifts, no rest from the constant 365 mental anguish of simply trying to survive.

In 2018, a report by the Joseph Rowntree Foundation found, two-thirds of children in poverty live in a working family. In the same year, a UN report by rapporteur Professor Philip Alston found, 14 million people live in poverty, that’s one fifth of the population. Four million of these more than 50% below the poverty line, and 1.5 million are unable to afford basic essentials, in other words – destitute.

The widely respected Institute for Fiscal Studies predicts a 7% rise in child poverty between 2015 and 2022.

Seven weeks after the government announced the furlough scheme, the FCSA continues to promote NMW as the only option available. Any attempts to move forward are immediately dismissed by statements that mislead, threaten expulsion and even suggest fraud. The FCSA state: ‘A number of umbrella employees have also contacted us this week suggesting that their contracts could be amended to remove any discretionary pay element. However, such an amendment would be at risk of being perceived as fraudulent in order to receive increased furlough pay.’

Incredible! – ‘In order to receive increased furlough pay.’ Anyone would think contractors are trying to take advantage of the furlough scheme. Contractors are paid NMW plus bonus and importantly HMRC know that. They have records going back years for contractors to show tax receipts for regular pay comprising both elements. I’m struggling to see how that can be perceived as fraudulent by anyone when that is the reality of what they are paid. A point reinforced by Max Winthrop, Chair of the Law Society Employment Law Committee: ‘If you get paid more for the work you do when on assignments, and you always get paid such extras, you could put the word “discretionary” in your contract in neon letters, but that isn’t a discretionary payment.’

A point further reinforced by Martin Lewis who managed to get: ‘an agreed publishable, attributable written quote,’ from a HMRC spokesperson who said: ‘Where the pay arrangements in practice clearly differ to those specified in the contract, the employer should consider the reality of the employment arrangements.

Terry Hillier, Chief Executive of People Group Services explained the word ‘discretionary’ was used in old contracts and referred to expenses that could be claimed. HMRC put an end to that since April 2016 for anyone working under supervision, direction or control (SDC), so the word ‘discretionary’ is entirely irrelevant. The FCSA should know this. Their codes of compliance claim to promote, ‘the highest level of professional and ethical standards in the UK.’ Why have they allowed umbrella companies to continue to use out of date contracts that are misleading, confusing and not fit for purpose? A far cry from professional or ethical!

At a time of pandemic when people are faced with loss, sickness and the stresses of lockdown, you would expect an employer to fulfil their most basic obligation and pay 80% regular pay as prescribed by government provision. It is a national scandal that contractors are forced to use umbrella companies profiting and masquerading as their employer that are only too happy to abandon them at a time of crisis, or relegate them to the hardships of poverty on 80% national minimum wage. The crisis conjures up images of Victorian times. Working people should not have to plead, ‘Please, sir, may I have some more please?’ This should not be happening in modern Britain with the sixth largest economy in the world.

It’s a national scandal and a shameful indictment on politicians, unions, industry and professional organisations who have all failed to even raise an eyebrow at the deliberate erosion of an agreed day rate back to national minimum wage. There has to be a better way to get paid. There has to be a more honest, simple, transparent, robust and equitable alternative to the immiserating schemes offered by umbrella companies. Why has nobody put their hand up to say: ‘this is wrong, this is unfair, people deserve better than this.’

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Published in Coronavirus Covid-19 ethics pandemic Teaching

4 Comments

  1. Habib Khan Habib Khan

    Thank you for providing a thorough and thought provoking account of how Umbrella companies work and the issues we are faced with. It shines a ‘bright’ light on how umbrella companies and agencies work and their intention behind this complicated and ‘immoral’ process.

    We as supply teachers need to stand up more for our rights and not lose out because of other people’s greed. What also has amazed me is that agencies do not communicate all this information at all keeping us in the dark. They even go further by not even mentioning the fee that umbrella companies will take out of our daily rate pay.

    This whole furlough episode has brought out the true colours of umbrella companies and some agencies (there are some very good agencies who do look after their supply teachers to the best of their abilities).

    Let’s hope that umbrella companies and agencies realise that if they are to be successful in the long term then they will have to move away from these bad tactics and immoral ways

  2. Simon Simon

    Why are supply teachers still getting screwed?

    Even among other teachers we still come across the perception that supply teachers get better pay than permanent teachers. Perhaps this idea stems from years ago when supply pools were administered by local authorities and were paid to scale, perhaps it’s from drawing a false equivalence with press reports of locum doctor pay rates.

    Wherever it comes from it’s wrong.

    I’ve been teaching for 13 years. My last permanent position was at the top of the main pay scale and in the Outer London area that currently equates to a salary of around £40k. Yet as a supply teacher I have to constantly battle with agencies to get paid any more than £120/day. A lot of people might be wondering why that’s a problem, after all £120 doesn’t seem too bad for a day’s work. Well to put it into context it comes in at potential earnings of £23,400. That’s under the lower threshold for NQTs across the country, let alone in London, and even then only if I manage to get work for every single one of the 195 possible teaching days with no time off for illness. And this day rate hasn’t increased since the period when I did supply after moving to London 10 years ago. Recent public sector pay increases, meagre though they are, have not filtered down to supply rates, in fact two years ago my average day rate was around £140/day.

    “Ah,” many will think to themselves reading this, “but the Agency Worker Regulations mean that after 12 weeks you’re entitled to equivalent pay.” True, but “being entitled to” is extremely different to “will receive”. Supply teachers often have to put up a fight to get equivalent pay after 12 weeks and in many cases find that long term positions suddenly end with little to no warning around the 12 week mark. Many supply teachers don’t know their rights and I’ve never come across an agency or school that of their own volition lets a long-term supply teacher know that they’re about to start getting paid an extra £80/day. In this respect I feel relatively lucky to know that as an experienced science teacher with a physics specialism I’m in a good position to ensure that agencies and schools pay me to scale when AWR kicks in. Others are less confident in asserting their rights and less secure in knowing that they are difficult to replace if schools decide they will cost too much. A lot of supply teachers just give in and accept whatever is being offered, knowing that the alternative is no work, no money to pay bills and their pupils facing yet more disruption to their learning.

    “But supply teachers can go home at 3pm. No marking, no planning: that’s the trade off you make.” For mid- or long-term supply this is total rubbish, supply teachers are doing the exact same job as permanent teachers but on lower pay and with no job security. Even for day-to-day and short term work this doesn’t hold true. Supply teachers are professionals who care about the students we teach and take pride in what we do: wherever possible we mark work, leave notes for the teacher whose classes we have covered, give praise and follow up behaviour incidents. Remember also that in primary schools supply teachers will have spent an extremely intense day with a single class of young children who struggle with changes to their routine; secondary supply teachers doing short term work will often have spent the day covering lessons outside their specialism and rushing from one side of the school to another with break and lunchtimes spent working out where their next class is and tracking down whoever has the cover work for it. Short-term supply, like all teaching jobs, is difficult and stressful.

    “What about the pension though? Teachers get one of those gold-plated, final salary, public sector pensions. That makes it all worthwhile.” The Teachers’ Pension Scheme is a significant benefit to those who spend their lives working in education. Since 2015 however it is no longer a final salary scheme and is instead calculated on a career average. It’s certainly still more generous than most private sector pensions, but do supply teachers get access to the TPS? Of course we don’t. The vast majority of supply teachers are engaged by agencies and can’t pay into the TPS. Agencies of course have zero interest in providing anything more than the minimum Workplace Pension required by all companies since last year.

    So, why do I do supply teaching? For me it’s about flexibility. I’m able to pick and choose when I work and fit it around other interests and occasional self-employment. I don’t have kids and I don’t have a mortgage so haven’t needed the security of a permanent position. Although my overall income takes a hit, my work hasn’t had to be my life and I’m generally happier.

    For the most part it’s worked out OK for me for the last few years. There have been times I’ve had to battle with agencies for a higher rate, there have been days I’ve turned up for a booking only to be told that it was a mistake and sent home, there have been classes that were a nightmare to control and schools where it has required a massive effort to ensure that unruly students were dealt with in line with the school policy: the “but you’re only a supply” attitude seems to extend further than just the pupils at times. But, for the most part, it’s been OK and despite the many ways in which supply teachers are screwed over my overall experience has been a net positive compared to permanent teaching in many respects, so long as I avoid thinking too much about retirement.

    And then all this happened. The last two months have been very difficult in terms of finances. Each time it has begun to feel like a government scheme or updated guidance might be that ray of sunshine that allows some seed of hope to grow, along comes another black cloud to throw everything back into shade.

    I was out of the country from mid-Feb to mid-March and came back just as my partner was recovering from a “severe flu-like illness”. Even though she no longer felt ill she hadn’t had a test so it seemed wise to follow the NHS advice and for both of us to isolate. After a week I got a call from one of my agencies and went in to one of the few schools still open for the final day before they all closed to all but a handful of students. That same day Rishi Sunak announced the Coronavirus Job Retention Scheme.

    Initially sceptical that the scheme would support supply teachers, a series of clarifications and updates made me more hopeful that along with other temporary workers we wouldn’t be left behind entirely. There seemed to be problems on the horizon for supply teachers who worked through umbrella companies but that didn’t overly concern me as I was paid directly by the two agencies I work for through PAYE arrangements, albeit with pay processed on an outsourced payroll. Or so I thought.

    After a few emails one agency confirmed they were going to be able to furlough me: there’d be a little delay but no big issues. Because of the small amount of work I had done with them the payment would only turn out to be just over £300 per month. With my other agency, the one that I earned two-thirds of my income through last year, it turns out that they aren’t my employer: the payroll company is.

    This was something of a shock. In 2018 I’d started to feel uncomfortable with umbrella companies and had asked all my agencies to pay me as a PAYE employee; I remained working for the only two that agreed. What this second agency had neglected to mention was that when they signed me up with their “outsourced payroll” I became an employee of the payroll company rather than the agency: it was essentially an umbrella scheme.

    I thought I’d specified to the agency I didn’t want that kind of arrangement; my payslips had always been headed with the agency’s name prominently displayed; my contact was always with the agency. How could I be employed by the company that processes their payroll? Checking back over my emails from the sign up process I realised I’d never actually read through the agreement they sent me, but who reads all that kind of stuff? Well, normally, me. Stupid and uncharacteristic of my habits: I felt like a fool for taking them at their word. I was also angry as hell. It felt like the agency and payroll company had made a deliberate attempt to misrepresent the arrangement. Agencies are now required to provide a Key Information Document to new starters clearly setting out how they will be employed, but in 2018 it seems it was acceptable to be less specific.

    I was still fairly hopeful. Other teachers were starting to realise that they weren’t actually paid a day rate through their umbrella company. The obscure structuring of the umbrella contracts means that pay was calculated at National Minimum Wage with the remainder made up of a “discretionary bonus”. So if they were furloughed under Rishi’s CJRS the umbrella would only be able to pay them 80% of NMW: the “bonus” didn’t form part of their salary and couldn’t be included. None of this had ever been explained to any supply teachers. The reasons why it’s done still aren’t clear but there it was in their contract and on their payslips: one of those things that no-one ever really realised because all they were checking was that their net pay looked correct.

    I was sure I was OK though. I’d checked my payslips. I knew they showed my my actual day rate. The umbrella-but-not-quite-umbrella arrangement I was on meant I would be furloughed at 80% of my actual pay. This time last year I’d been working 5 days a week on a full AWR equivalent rate of £200/day. Panic unnecessary. I was going to be OK for the next month or so of lockdown.

    Nope.

    There was a sneaky little clause in the employment contract stating I’m paid the same NMW plus bonus structure “even if not separately identified on your payslip.” What? Wait, how can they claim I’m paid that way when my payslip contradicts it? Turns out payslips just have to show the deductions and final amount correctly, anything else is just ink on paper.

    Umbrella companies were all saying the same: they couldn’t pay us anything other than 80% of NMW and while they were waiting for updated guidance we would get nothing. I did what all the rest of us angry supply teachers were doing: I wrote a rant on Facebook; I wrote to my union; I wrote to my MP. And we all waited.

    There was still hope. The FCSA, a membership body for umbrella companies, were pressing for updated guidance. Martin Lewis was pushing for the “bonus” to be included in furlough calculations. We waited. Hope began to wane.

    Then, success! HMRC had updated the guidance. Maybe all would be OK. Those “discretionary” bonuses weren’t actually discretionary. Umbrella companies could claim 80% of their employees actual earnings for the purposes of furlough. People started posting on the Facebook supply teacher pages that they’d had an email confirming they would be furloughed, none that were with the same umbrella company as me yet. I waited.

    OK, now people who were with the same company were saying they’d got an email. They’d got dates. Why wasn’t I hearing anything? I called and was told there had been delays, I’d get an email tomorrow. I waited. I emailed the CEO: why haven’t I had an offer of furlough yet? They had some problems with processing everything, I would get an email on Monday. I waited. I waited. I waited. Then, after emailing and calling several more times, I got an email to let me know that in actual fact I wouldn’t be furloughed: the company had decided they were going to impose a cut off date and only furlough employees who had been paid between 1st Feb and 19th March. As my last pay from them fell outside these dates they were simply choosing not to apply to the CJRS for furlough payments for me.

    Yet. Another. Instance. Of. Supply. Teachers. Getting. Screwed.

    There’s nothing in the guidance from HMRC to say that I’m not eligible but there’s no appealing the decision; it is completely their choice. For most companies the choice would be between furloughing their employees or continuing to pay them if there is work to do but umbrellas can simply choose not to furlough any of their workers and leave them with no pay and unable to access the financial support that is available to others. This seems to be a widespread decision among umbrella companies: their attempts to justify it run along the lines of “not having confidence that HMRC would regard you as eligible were we to be audited” and “the guidance is unclear”. Appeals to sense based on quoting the actual HMRC guidance are either ignored or shrugged off. We won’t be furloughed. End of.

    I’ve written to my MP, I’ve signed all the petitions, I’ve raised it as casework with my union. I don’t have much hope that anything will come of it. Meanwhile the furlough payment from the other agency added to my Universal Credit claim total just under £600: not even enough to pay my rent.

    Undervalued, underpaid, unprotected. At some point it starts to feel like it’s all deliberate.

    Supply teachers are still getting screwed.

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