The Job Support Scheme
This afternoon the Chancellor, Rishi Sunak, has urged people “not to live in fear” as he set out the government’s new job retention measures in a statement to the House of Commons.
Whilst the furlough scheme will still come to an end on 31st October, the Chancellor confirmed that this would be replaced by a “Jobs Support Scheme” which would allow millions of employees to go part time but whilst keeping around four-fifths or more of their earnings.
Unlike the furlough scheme which provides support to employees out of work, the Jobs Support Scheme will help employees in work and give employers the option to keep people in work on short hours, rather than making them redundant. The Scheme will run for 6 months from November. Although we are waiting full details, including the relevant legislation, it appears in part that the Jobs Support Scheme will somewhat mirror the existing principles of Short Time Working.
To be eligible, employees will have to work at least one-third of their normal hours and be paid for that by the employer. For the remaining hours not worked, the government and employer will each pay one third, with the government’s contribution being capped at £697.92 per month. Whilst we are awaiting further details regarding the method of calculation and what the interplay with things including: holiday entitlement and sick pay details will surely be announced very soon. The new Scheme will be open to all employees, even if they were not previously furloughed; giving employers greater flexibility.
All SMEs are eligible, and larger businesses will be eligible if, but only if, their turnover has fallen through the Covid-19 crisis, although what this actually means and how businesses will have to quantify their losses we do not yet know.
Other measures announced by the Chancellor include:
- An extra boost hospitality and tourism sectors, by extending a VAT cut until the end of March.
- Emergency loan schemes for businesses hit by Covid-19 being lengthened from 6 to 10 years.
- Firms can also enjoy more flexibility including six-month payment holidays during lean times, in a plan the Chancellor dubbed “Pay as You Grow”.
For more information on the Job Support Scheme visit the Gov website or if you would like to speak to a member of the Employment Law team call us on 01274 864999.