Within hours of the Prime Minister announcing new national lockdown restrictions for England, the UK Treasury has confirmed that the extension of the Furlough Scheme will apply across the whole of the UK, not just in England.
Employers would be forgiven for wondering why the Prime Minister couldn’t have made this clear during his initial announcement, but will be grateful HMRC have at least moved quickly to provide clarity.
Employers will have flexibility to bring furloughed employees back to work on a part time basis or furlough them full-time, and will only be asked to cover National Insurance and employer pension contributions which, for the average claim, accounts for just 5% of total employment costs, so the cost for employers of retaining workers will be reduced compared to the current scheme, which ends today. .
The Job Support Scheme, which was scheduled to come in on Sunday 1st November, has been postponed until the furlough scheme ends.
Many Employers will have already taken steps to end furlough for employees from next week and may have either told them to return to work under their normal contracted hours, or agreed a short-time working arrangement.
The decision to extend the Furlough Scheme shouldn’t effect any arrangements already reached with employees, but does mean the mechanism for reclaiming costs will remain the CJRS portal.
Employers unsure about how this extension to the Furlough Scheme might impact the arrangements they have made with employees should take advice to ensure they remain complaint with the Terms of the Furlough Scheme and associated employment legislation.
Support for Employers
If you require any advice or support, please contact our team of employment law specialists to get clear and purposeful advice.
Prime Minister Boris Johnson has announced this evening a second national lockdown for England as the UK passes one million Covid-19 cases.
In a press conference from Downing Street this evening, Prime Minister Boris Johnson has announced that with effect from Thursday 5 November 2020, there will be a National Lockdown across England until at least 2 December 2020, subject to the new measures being approved in Parliament early next week.
Key Lockdown Measures
Lockdown will come into force on 5 November and last until 2 December 2020.
The CJRS (Furlough Scheme) will not end today but will now be extended until 2 December*
Non-essential retail and hospitality will close.
Pubs, bars and restaurants to close, except for takeaways.
Schools, colleges and universities will remain open.
Households will not be allowed to mix indoors or outdoors.
Shielding measures will not be re-introduced, but vulnerable people or those aged over 70 are told to be especially careful.
* During his press conference, the Prime Minister failed to clarify whether the extension of the Furlough Scheme until 2 December 2020 was limited to England, or if it would be extended to Scotland, Wales and Northern Ireland.
The Furlough scheme was due to end at midnight tonight and thousands of Employers throughout the UK will have already taken steps to have staff return to work next week, potentially on a short time working basis, expecting to take advantage of the new Job Support Scheme.
The lack of clarity around the extension of the Furlough Scheme and whether this includes Scotland, Wales and Northern Ireland will have left thousands of Employers wondering what the status of their staff will be when they return to work next week; will they be flexibly furloughed or will they be on short-time working and which grant scheme will Employers need to use to reclaim wage costs?
It seems unlikely that the extension of the Furlough Scheme would be limited to England, but until Downing Street clarify the position Employers outside of England will be wondering what the status of their staff will be when they return to work next week.
Death by a Thousand Cuts for Thousands of UK Employers
Employers have already had to endure 7 months of COVID-19 restrictions with thousands of businesses having been forced to remain closed since March and thousands more, who were eventually able to re-open as restrictions were eased, forced to close again when the localised tiered system of COVID-19 restrictions was introduced.
These latest restrictions announced by the Prime Minister will see England returning to a national lockdown reminiscent of the restrictions imposed across the whole of the UK back in March, the main difference being schools and colleges will be allowed to remain open.
In Scotland, the new 5-tier restrictions come into force on Monday 2 November 2020 and in advance of this, First Minister Nicola Sturgeon has issued new advice that people should not travel to or from England, except for essential purposes.
In Wales, First Minister Mark Drakeford said that his cabinet will meet on Sunday to “discuss any potential border issues for Wales in light of any announcement by No 10” but confirmed that the 17-day “firebreak” there will end as planned on 9 November.
We will continue to monitor developments and provide an update once the position becomes clearer.
Support for Employers
If you require any advice or support with any employment matter, COVID related or otherwise, please contact our team of employment law specialists to get clear and purposeful advice.
If you are an employee and find yourself in a situation where you have been advised by your employer that they want to bring the employment relationship to an end, by reason of redundancy or by way of a Settlement Agreement, or you believe your employment rights have been breached in any way, the team at Employment Law Services (ELS) can help you.
With the Coronavirus Job Retention scheme due to end on 31 October 2020, Employers have one week to decide what to do with staff who are currently furloughed and/or flexibly furloughed.
Following yesterday’s announcement by the Chancellor, HMRC has published a policy paper containing more details on the Job Support Scheme which now defines the scheme is two ways:
JSS Open; and
JSS Closed
Under JSS Open, an employee will need to work at least 20% (no longer 33%) of their normal hours. They will receive normal pay for the hours they work, and two-thirds of pay (subject to a cap which bites against those earning more than £3,125 a month) for the hours they do not work. For that two-thirds top-up, the government will pay 61.67% and the employer will pay 5%, plus NI and pension contributions on the full amount. That is a significant change from the previous 50:50 split towards the two-thirds top-up, shifting the financial cost overwhelmingly to the public purse. There must be a written agreement between employer and employee, agreeing to the changes.
Under JSS Closed, the position remains that the employee will receive two-thirds of their normal wages, funded by the government (again, with a cap biting against those who earn more than £3,125pm). The employer will have to pay the NI and pension contributions on that amount. Again, there must be a written agreement between employer and employee, agreeing to the changes.
The policy paper provides some detail about how the scheme will operate, eligibility criteria and how to calculate pay, but full details are still to be confirmed and Treasury Direction is expected to be issued soon.
Decision Time for Employers
In the meantime, Employers will need to decide what to do with who are currently furloughed and/or flexibly furloughed and our multi-award-winning team of employment law specialists are ready to help you!
We can give you advice and support on:
Ending furlough and/or flexible furlough
Employment contract changes necessary to utilise the Job Support Scheme
Drafting and providing written agreements between employer and employee, agreeing to the changes.
The correct redundancy processes to ensure fairness and legal compliance
Utilising settlement agreements as an alternative to a full blown redundancy process.
On Thursday 22 October 2020 the Chancellor announced a package of further economic measures to support businesses affected by the ongoing COVID-19 pandemic.
The package announced by the Chancellor in a statement to the House of Commons includes significant changes to the short-time working Job Support Scheme (JSS), expanded grants for businesses in high-alert areas, and increased grants for the self-employed.
The announcement of increased Government contributions under the JSS comes just two weeks after an extension to the Scheme was announced and will be warmly welcomed by many employers that were facing the prospect of having to make redundancies at the end of October.
Under the JSS, an employee will now only need to work and be paid for at least 20% of their normal hours, not 33% as originally announced. For the employee’s remaining (unworked) hours, the government will provide up to 61.67% of the employee’s normal wages, up to £1,541.75 a month (up from £697.92 as originally announced). The employer will contribute the other 5% of the unworked hours (not 33% as originally announced). These changes are being made with a view to enabling businesses to retain staff and avoid redundancies. The JSS for businesses legally required to close their premises remains unchanged.
There has been no change to the eligibility requirement for the JSS, such that all small and medium sized businesses will be eligible. Larger businesses are only eligible if their turnover has fallen during the pandemic. Eligible employers will be able to claim under both the JSS and the Job Retention Bonus (for employees who have previously been furloughed).
The government will also increase the amounts available under the next tranche of the Self Employment Income Support Scheme (SEISS). For those currently eligible for SEISS and who continue to actively trade but face reduced demand, the initial taxable grant will now be worth 40% of average monthly trading profits, up to a total of £3,750, covering the period from November 2020 to January 2021. The level of the second grant covering February to April 2021 will be set at a later date.
In England, business grants of up to £2,100 a month will be made available for businesses in the hospitality, accommodation and leisure sectors which have not been required to close but are impacted by restrictions in high-alert areas. These grants will be available retrospectively for areas which have already been subject to restrictions. The grants will be administered and distributed by local authorities, who will determine which businesses are eligible for funding.
In Scotland, the First Minister announced that the current temporary restriction will remain in place until 2 November 2020, by which time they will have published details of their 5 tier COVID restrictions alert system. In the meantime, funding for business grants over this period will be increased proportionately. The COVID-19 Restrictions Fund will now provide one-off grants of up to £4,310 to businesses required to close by the regulations in Scotland and for businesses that remain open but are directly impacted by the restrictions, the maximum hardship fund grant will increase to £2,155. In addition, grants of £1,650 will help those businesses that are required to close to meet the 20% employer’s contribution they are required to pay under the UK Government’s CJRS.
However, these one-off grants in Scotland are for the period until 2 November 2020 and the Scottish administration has yet to clarify and/or confirm whether it intends to mirror the monthly grant scheme introduced in England.
We will be updating our FREE COVID-19 Guidance for Employers and comprehensive FAQs document in the coming days to help employers understand the key elements of the new JSS to assist them in planning what to do when the furlough scheme comes to an end on 31 October 2020.
In the meantime, if you require any advice or support with introducing short time working via the Job Support Scheme, redundancies or any other employment matter, please contact our team of employment law specialists to get clear and purposeful advice.
On Friday 9 October 2020 the Scottish administration ordered the closure of pubs and restaurants across central Scotland and with the UK Government considering similar ‘local’ lockdown restrictions for many parts of England, the Chancellor announced the extension of the new Job Support Scheme (JSS).
The extension of the JSS is intended to provide temporary support to businesses whose premises have been legally required to close as a direct result of coronavirus restrictions and will see affected businesses receiving grants towards the wages of employees who have been instructed to and cease work. The UK government will now pay two thirds of employees’ usual wages, up to a maximum of £2,100 per month and employers will not be required to contribute towards wages, but will need to cover employer National Insurance and pension contributions.
The announcement of an extension to the JSS comes hot on the heels of the new Scheme being introduced by the Chancellor just two weeks earlier and will undoubtedly be welcomed by many employers, but the end of the CJRS (furlough scheme) will still leave many employers unsure about their future and that of their employees.
We have updated our FREE COVID-19 Guidance for Employers and collated a comprehensive FAQs document to help employers understand the key elements of the new JSS to assist them in planning what to do when the furlough scheme comes to an end on 31 October 2020.
Check out our summary of the new JSS here and to get answers to many of the frequently asked questions about the Job Support Scheme (JSS).
Support for Employers
The COVID-19 lockdown restrictions and various government schemes being introduced by the UK government continue to present numerous and complex challenges for Employers.
If you are an Employer and require advice and support on any employment matters, COVID related or otherwise, call us now on 0800 612 4772 or Contact us via our website and we will set assist you to navigate through the employment law minefield created by the COVID-19 crisis and comply with your legal obligations.
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