In late September 2020, the Chancellor, Rishi Sunak announced a new Job Support Scheme to replace the furlough scheme in the bid to help protect those companies that were forced to shut down during the lockdown. It will start on 1st November and run for six months. This blog by JMR Solicitors summarises the main points of the new job retention scheme from an employment law perspective.
The furlough scheme is due to end on 31st October 2020. The new Job Support Scheme will start as soon as it ends, on 1st November 2020 and remain in place until the end of April 2021.
The Scheme will offer continuing wage maintenance for people in work, provided the employer meets certain access conditions in that the employee is working at least 33% of their usual hours, and the employer also provides supplementary wage support.
The government has published a Winter Economy Plan which gives a brief outline of the Job Support Scheme and a factsheet which can be found here.
The main points of the Winter Economy Plan are summarised below:
- The Job Support Scheme does not have sector distinctions so is available to all.
- Employees need to be working a minimum of a third of their normal working hours, which must be paid by their employer as usual. This is distinct from the furlough scheme which meant they did not need to work any hours to be eligible.
- The aim of this new scheme is to support viable jobs, rather than those jobs that are going to be made redundant
- Employers and government distribute the extra wage support for unworked hours. For every hour not worked the employer and the government must each pay one third of the employee’s usual pay, and the government contribution will be capped at £697.92 per month.
- All small and medium sized businesses will be qualified for the Job Support Scheme. But, larger businesses will be entitled only if they can prove that their business has been badly affected by the Covid-19 pandemic. This is the difference from the furlough scheme which had no limitations on access and did not involve a requirement to prove any decline in business.
- Employees who are given the job retention scheme cannot be made redundant or put on notice of redundancy throughout the period within which their employer is claiming the grant.
- Though, it appears that employees can be moved out of the scheme during the 6-month period to be made redundant, therefore it does not involve a prohibition on redundancies.
- Employers do not need to have used the furlough scheme. The Job Support Scheme will be open to employers even if they have not previously used the furlough scheme.
What do employers need to do next?
While important details are yet to be released in relation to the job retention scheme, employers who wish to utilise of the scheme for their employees may still need to act fast with less than a month until it comes into play. Key verdicts involve deciding whether you want to make use of the scheme at all, whether you, as the employer are able to “top up” the scheme, if the employer wants to offer access to the scheme to all staff or just some staff (and, if some staff only, how is the employer going to select those who will be chosen for the scheme), what shared and separate consultations needs to take place before the scheme is initiated, and how to go about attaining employee consent.
Contact JMR Solicitors for employment law matters concerning the job retention scheme
If you require legal advice for updating employment contracts, consultation of employees and other legal matters concerning the job retention scheme, contact JMR Solicitors on 0161 491 3933 or email email@example.com