Lisa Bryson: Success of Chancellor’s Job Support Scheme is critical for business survival
Lisa Bryson, partner and head of employment at Eversheds Sutherland in Belfast, highlights the importance of the successor to the Covid-19 furlough scheme.
Six months on from the Chancellor’s first major intervention through the Coronavirus Job Retention Scheme (CJRS), Covid-19 is on the resurgence again. With a difficult winter period ahead, the latest intervention from Government through the ‘Job Support Scheme’ (JSS) will be welcomed. Despite repeated assertions that financial support for businesses and workers would be curtailed at the end of October, this new and evolved scheme once again recognises the severity of the situation.
Unlike the CJRS which sought to save every job and business, the JSS is much more targeted – something that may come as a disappointment. The requirement for at least a third of normal hours to be worked is a significant change and as such, there must be enough work available for employees to work these reduced hours. This ultimately means employers in sectors which remain virtually or totally shut down will not be able to access the scheme for many, if any, of their staff.
On a practical level employers with reduced work, will have to consider whether they would prefer to have a smaller compliment of staff working more hours or to share what work is available across teams. Of course, this is a two-sided coin and employees could simply choose to leave if they can obtain a better financial offering elsewhere. However, in the current market, this seems more challenging.
The fine detail of exactly how the JSS will operate will become much clearer in the coming weeks. However, subject to further clarifications, we know that the JSS will commence from 1 November 2020, will run for a period of 6 months and is open to all employers with a UK bank account and a UK PAYE scheme.
Ultimately, this scheme is aimed at employers for whom employees can undertake some work - a minimum of one third of their usual hours. The Government, with the employer, will top up a percentage of the (up to) two-thirds shortfall in working hours, subject to a cap of £697.92 per month. However, while all small and medium-sized enterprises will be eligible, large businesses will be required to demonstrate that their business has been adversely affected by Covid-19.
The scheme is also open to businesses even if they did not avail of the CJRS. This means that employers can access the JSS for ‘new staff’ including those hired since March until 24 September. During the period within which an employer is claiming for this JSS payment, employees cannot be made redundant or indeed, put on notice of redundancy.
On top of this, unless employers have a contractual right to reduce working hours, new contractual terms will have to be agreed with staff and, potentially, trade unions in this respect.
Despite speculation to the contrary, another welcome element of this new scheme is that employers retaining furloughed staff on reduced hours under the JSS will also be able to claim the CJRS retention bonus next year. A relief for many no doubt.
It is obvious that there is no easy response to the pandemic, which now appears to be an enduring factor of all our lives, certainly in the short term. This latest economic response appears to align with the Government’s perception of an appropriate balance between protecting the economy and preserving viable jobs across the UK.
Of course, the degree to which this latest intervention will achieve its central objective will be appraised in the months to come. For now, the fine detail of just how the JSS will operate is urgently awaited by employers to better-inform the extremely difficult commercial decisions so many are facing.