Announcement on Job Support Scheme for Employees

Posted on September 23, 2020

At the end of October, the furlough scheme as we know it comes to an end and employers have to decide if they are bringing their staff back into the workplace.

What is the Job Support Scheme (JSS)

At the time of writing the Chancellor, Rishi Sunak, announced a Job Support Scheme (JSS) as the Coronavirus Job Retention Scheme comes to an end, whereby, from 1^st November 2020, the government will share the cost of one third of employees’ lost wages, up to a cap of £697.92, as long as the employee is kept on and works at least a third of their contracted hours.

Are all employees eligible?

Employees must be on an employer's PAYE payroll by the September 23rd
For the first 3 months of the JSS scheme employees must work a minimum of 33% of their usual contracted hours. After 3 months the Government will consider whether to increase this minimum hour threshold.
Employees will be able to come on and off the scheme and do not have to work the same hours each month, however the working arrangement must cover a minimum period of seven days.

Hourly Rate (per hour)	£10.00
Contracted Hours (per week)	36
Reduced Hours (per week)	12
Reduced Weekly Pay	£120.00
Lost Weekly Pay	£240.00
Employer Top Up	£80.00
Government Top Up	£80.00
Job Support Scheme Top Up	£160.00
Total Weekly Pay	£280.00
Total Weekly Pay %	78%
Employee Lost Pay	£80.00

_{Data Source: www.gov.uk - Job Support Scheme excluding pension and NI contributions}

Employees cannot be made redundant or put on notice of redundancy during the period of the JSS and employers can benefit from both the JSS and Job Retention Bonus (£1,000 per employee who is kept in employment). This may mean that fewer employees will be made redundant, but we anticipate that employers will be carrying out a cost benefit analysis, to see where savings are the greatest, and the scheme may not “save” all the potential redundancies that were expected.

Employees anticipate Job Changes as Furlough Scheme comes to a close

For some employees the end of furlough will be a transitional time as it could have been several months since they were last in work if they have been furloughed the whole time.

Key Dates for Furlough Changes

	Aug	Sept	Oct
Government contributions: Employer NI & pension contributions	No	No	No
Government contributions: Wages	80% up to £2,500	70% up to £2,187.50	60% up to £1,875
Employer Contributions: Employer NI & pension contributions	Yes	Yes	Yes
Employer Contribution: Wages	-	10% up to £312.50	20% up to £625
Employee receives	80% up to £2,500 pm	80% up to £2,500 pm	80% up to £2,500 pm

_{Data Source: www.gov.uk - changes to the coronavirus job retention scheme}

During August, employers were entitled to reclaim 80% of their employees’ pay, excluding employer’s pension and National Insurance contributions.
From September onwards, employers have been required to pay at least 10% towards the amounts payable to their employees, ie. they will only be able to reclaim 70% of pay and therefore, along with pension and employer National Insurance contributions, this may mean that employers start to consider potential redundancies.
Employees can still be placed on furlough in rotation with fellow employees IF they had been placed on furlough prior to June 10th 2020. However, if they have not been furloughed before this date they can no longer be furloughed. If the employer does not have enough work for its employees it will now have to lay them off, put them on short time working, or make redundancies. If put on short time working, the new announcement today seems to indicate that, from 1^st November, the government, employer and employee will share the cost of the lost hours.
As of October 1^st 2020, employers will have to contribute at least 20% of the amount payable to employees. Whilst most employers are trying to take advantage of the furlough, and flexible furlough (if applicable) schemes, it is very likely that, with impending additional costs, they may consider, in addition to redundancies, the potential for changing terms and conditions of employment for those employees who are retained, so as to cut pay or hours (or both).

If you are required and agree to being placed on furlough after the June 10th 2020, you should be aware that, unless this is permitted because you had previously been placed on furlough, there is every chance that this could be unlawful.

“Unfortunately, if employers are required to lay off the staff who have not previously been on furlough, the only statutory entitlement for employees in this situation is to receive £30 per day for 5 days as a statutory guarantee payment, for the total lay off period,” advises head of employment law, Susan Mayall.

Employment Contracts

“However, if your contract of employment does not contain a clause entitling the employer to lay you off in the event of a drop in work, then this could be a breach of contract entitling you to full pay for the period of the lay off, or you may in fact, in certain circumstances, be able to claim that you are redundant,” adds Susan.

Similarly, if an employer requires employees to agree to take a cut in pay after the end of the furlough period, then this would be a fundamental change in the contract of employment.

Under these circumstances, the employees are entitled to proper consultation and a notice of any impending changes and normally an employer should seek the employees’ consent to such a fundamental change as a reduction in pay.

Redundancy Worries

“This could potentially be a worrying time for many employees and if you do not agree that the changes might be made (which may include the inclusion of a lay off clause previously omitted from the contract of employment), then you are entitled to object (sometimes known as “standing and suing”),” says Susan.

The law in this area is complex but should you find yourself in a situation where your employer wishes to lay you off where you have not previously been furloughed or to cut wages or hours following the furlough period, then it is important that you take legal advice as there are many potential avenues available to you to challenge your employer’s proposals.

“It remains to be seen how many employers will take up the new JSS as a way of avoiding redundancies. It also means that if employers require employees to work shorter hours, they may now be able to do so with the knowledge that they can cover at least the majority of the pay of those employees in a way that might avoid legal claims such as might arise in a period of unpaid lay off or where an employer has simply required its employees to take a pay cut” Susan concludes.

For advice on how to deal with your employment problems please call 0161 785 3500 for a no obligation chat, or email enquiries@pearsonlegal.co.uk

Please note that the information and opinions contained in this article are not intended to be comprehensive, nor to provide legal advice. No responsibility for its accuracy or correctness is assumed by Pearson Solicitors and Financial Advisers Ltd or any of its members or employees. Professional legal advice should be obtained before taking, or refraining from taking, any action as a result of this article.

This blog was posted some time ago and its contents may now be out of date. For the latest legal position relating to these issues, get in touch with the author - or make an enquiry now.