24 September, 2020
Rishi Sunak has today unveiled the Government's plan to protect jobs and support businesses over the coming months following the announcement earlier this week, which warned Britons that restrictions could be in place for the next 6 months.
The Chancellor confirmed that the current Coronavirus Job Retention Scheme (known as the furlough scheme) will come to an end on 31 October as planned and will not be extended as, in his words, "it is fundamentally wrong to hold jobs that only exist under furlough".
However, it will come as much relief to both employers and employees alike that going forwards businesses may be able to access financial support under the Government's new "Job Support Scheme", of which the Chancellor's key motive is to "support people in viable jobs with genuine security" who are working at least a third of their normal hours.
The Job Support Scheme will be in place provisionally for 6 months and is due to start on 1 November 2020.
Employers will continue to pay the wages of staff for the hours they work - but for the hours not worked, the government and the employer will each pay one third of their equivalent salary. This ensures that employees who can only go back to work on shorter time will still be paid two thirds of the hours for those hours they can't work.
In order to support only viable jobs, employees must be working at least 33% of their usual hours. The level of grant will be calculated based on employee's usual salary, capped at £697.92 per month.
The Scheme will be targeted towards businesses that need it the most in sectors that have been most hit by the pandemic. All small to medium businesses will automatically be eligible for the scheme. Larger firms will be required to prove that their profits have been affected by COVID-19 to be able to utilise the scheme. Larger businesses will also not be allowed to pay dividends to shareholders whilst using the new scheme.
The Scheme is available to all businesses regardless of whether or not they have previously used the furlough scheme.
Employers can continue to claim the Job Retention Bonus alongside the Job Support Scheme.
For further information on the scheme as it as currently been announced please see: https://www.gov.uk/government/news/chancellor-outlines-winter-economy-plan
Other measures and support announced today by the Chancellor include:
At Forbes Solicitors our Employment Team have been working tirelessly with our clients during the pandemic to support and advise them on implementing the Coronavirus Job Retention Scheme, providing legal and practical guidance through restructures and redundancies as well as handling numerous HR queries arising as a result of the pandemic on areas such as sick pay, home working, child care.
We continue to be here to work with you and whilst today's announcement lacks the detail you need to implement changes immediately rest assured that we will bring to you the detail from the guidance as soon as we see it and have digested it. We have plans to hold a briefing session to be brought to you by Emma Swan, Partner and Head of Commercial Employment, followed by our Q&A session with Jonathan Holden, Partner and National Head of Employment as soon as possible.
Learn more about our Employment & HR department here