As the Coronavirus pandemic has continued to develop here in the UK, thousands of employers and employees have continued to suffer financially and with the furlough scheme due to end on 31st October 2020, many were left wondering whether any further support would be available.
On 24th September 2020, the Chancellor announced that a new Job Support Scheme (JSS) will come into effect from 1st November 2020 and will run for a period of six months.
The intention of the JSS is to safeguard jobs in businesses that will face a lower demand over the winter months as a result of COVID-19. Therefore, where employers are considering making redundancies, they are being encouraged to keep employees in work but on reduced hours.
The Government has published a Factsheet about the Scheme. We are expecting to receive further information with regards to the JSS over the coming weeks, however for the time being we understand that the scheme will operate as follows:
- In order to be eligible under the scheme, an employee must be on their employer’s PAYE payroll on or before 23rd September 2020.
- For the first three months of the JSS, an employee must work at least 33% of their usual hours. The employer will be liable to pay the employee for these hours worked at the employee’s normal contractual salary. After three months the government may consider increasing this threshold.
- For those hours not worked, the employee will still be paid but only up to two thirds (based on the employees’ normal contractual salary) – 22% will be paid by the employer and 22% will be paid by the government. The government’s contribution will be capped at £697.92 a month. Therefore, where the government cap does not apply, an employee will receive at least 77% of their usual pay.
- The grant available under the JSS will not cover Class 1 employer national insurance contributions or pension contributions which will need to be paid by the employer.
- Each employee will not have to work the same work pattern each month, however each short-time working arrangement must last for a minimum period of 7 days.
- Those employees on the JSS cannot be made redundant or given notice of redundancy.
- The new working arrangements must be agreed in writing between the employer and employee. HMRC may ask for evidence of this documentation which will have to be provided upon request.
- An employer will be able to start making claims under the JSS from December 2020.
- The JSS will be available to all small and medium sized businesses. It appears that larger businesses will only be eligible to claim for a grant under the scheme if they can demonstrate that their turnover has decreased during the pandemic.
- Employers who previously haven’t used the furlough scheme will still be eligible to apply for a grant under the JSS.
As we saw with the furlough scheme, the devil is going to be in the detail of the guidance, which the government has said will be released soon.
Many employers won’t feel that they are in a position to pay 55% of a worker’s salary for 33% output so it remains questionable as to whether we will see further redundancies on the horizon. Commercially, if redundancies are looking like an inevitable option, we would urge employers to start thinking about / commence a redundancy process swiftly. This is to ensure a dovetailing of the phasing out of the furlough scheme with consultation / notice requirements - note those employees on the JSS cannot be made redundant or given notice of redundancy.
We understand that this is a difficult and confusing time for both employers and employees and we will endeavor to post employment related updates as soon as possible when further information becomes available.
Please contact us if you would like more information about the issues raised in this article or any other aspect of employment law at 02920 345 511 or firstname.lastname@example.org