News & Events
With the end of the Coronavirus Job Retention Scheme (CJRS) looming and the introduction of the new Job Support Scheme on the 24th October, employers are faced with a raft of matters to consider when it comes to their employees. Here, Nick Wilson, partner in our dedicated employment law team, breaks down the current position and key issues for employers.
There have been calls for the Government to extend the Coronavirus Job Retention Scheme beyond its end date of 31 October 2020 for several months now but the consistent message has been that this will not happen. Instead, the Chancellor, Rishi Sunak, has now announced the introduction of the Job Support Scheme (JSS) with the focus on ‘protecting viable jobs’, once the furlough scheme is wound down. It is possible that Mr Sunak has taken inspiration from Germany and France, who operate similar schemes, although the French model was introduced before the pandemic took hold.
Whilst the formal rules of the JSS are yet to be published, it is clear that the scheme is not a direct replacement for furlough leave and pay. The objective of the scheme appears to be for the Government to top up the wages of those employees who are placed on short-time working, due to the Covid-19 pandemic. The JSS applies to all workers of small and medium businesses and some larger organisations, if they can demonstrate that their income has been directly affected by the pandemic. Of particular note is the fact that the JSS also applies to workers who have not previously been furloughed.
So what do we know of the scheme details so far?
- The JSS will begin on 1 November 2020 and last for six months;
- It applies to workers whose hours are reduced because of the pandemic but who are able to work at least a third of their normal hours of work. This minimum hours threshold will be reviewed after three months;
- The worker will be paid as normal for hours that they work;
- For the hours that the worker cannot work, the employer will cover a third of that pay with the Government contributing another third. The remaining third will be ‘lost’;
- Workers must have been on the employer’s Real Time Information submission to HMRC by no later than 23 September 2020 for the employer to be able to claim grants in respect of them;
- The period for which the employer may claim under the JSS must be at least 7 days;
- The JSS grant covers only the worker’s ‘normal’ pay, the employer remains responsible for employer’s class 1 National Insurance and pension contributions;
- What constitutes ‘normal’ pay will be similar to the rules adopted under the CJRS;
- The amount of the JSS grant is capped at £697.92 per month per employee;
- The grant is paid in arrears, meaning that it is effectively reimbursing the employer for monies already paid out;
- Employees cannot be made redundant or put on notice of redundancy during the period within which their employer is claiming the grant for that employee;
- Any changes to the employee’s working arrangements must be agreed with them and confirmed in writing – a similar approach to the requirement for written agreement under the CJRS; and
- HMRC will be checking claims. We already know that fraudulent CJRS claims are being investigated and over £200 million of wrongly claimed furlough grants have already been repaid.
Will the JSS achieve the objective of staving off mass redundancies over the winter months? Only time will tell. In these uncertain times we are advising all businesses to keep in close contact with their professional advisors to ensure that they are in the best possible position to adapt to the current situation as it unfolds.
If you would like to discuss any of the implications for your business, get in touch with the employment team on 01482 325242, or email directly on email@example.com
Correct as at 10am 25.09.2020