As the Chancellor announces a new Job Support Scheme, lawyers at Irwin Mitchell say while the proposals may save some jobs, many employers with redundancy processes already underway will be furious the scheme has been announced so late.
A new package of support to help businesses retain staff once the furlough scheme ends on 31 October 2020, the Job Support Scheme will start on 1 November 2020 and will last for six months until 30 April 2021.
The scheme aims to support the wages of people in work and give employers the option to keep people in work on shorter hours rather than make them redundant. The key points are:
- The scheme is only available to business who can demonstrate that they have ‘viable jobs’. This means workers must work for at least 1/3 of their normal hours and their employer must pay their normal rate for those hours. The Government and the employer together will then increase those employees’ wages covering 2/3 of the pay they have lost by reducing their working hours. The government will pay a maximum of £697.20 per month.
- The government will target its support on those businesses that need it most. All SME’s are eligible but larger employers will only be able to receive support if their turnover has fallen during the crisis.
- The new scheme is open to employers across the UK even if they have not previously used the furlough scheme.
- Businesses eligible for the Job Retention Bonus can still claim under this new scheme.
Jo Moseley, Employment PSL and Senior Associate at Irwin Mitchell said, “There is no doubt that this announcement may save many jobs – at least in the short term.
“But many employers that have already begun or are close to concluding redundancy programmes will be furious that the Chancellor has left it so late to make his plans clear.
“The fact is that businesses and many MP’s have been asking the government for clarity about what would happen when the furlough scheme ends for weeks and many have had to make hard decisions in the vacuum.”