Understanding the Chancellor's Job Support Scheme: Jenny Hawrot, Willans LLP

Written by: Jenny Hawrot, associate solicitor at Willans | Posted 25 September 2020 7:02

To help steer businesses and employees through a tough winter and avoid the much-feared ‘cliff-edge’ as the furlough scheme comes to an end, today Chancellor Rishi Sunak has introduced a range of business support measures.

The furlough scheme will reach an end on October 31 as expected, but the Job Support Scheme will step in to offer a helping hand for employers and employees. This scheme will run from November 1 to April 30 next year.

The aim of the scheme is to protect ‘viable jobs’; enabling employers to keep staff in a job albeit for shorter hours, in the hope of reducing redundancies.

While larger businesses will only qualify for the scheme if they can show a reduction in turnover during the coronavirus crisis, all small and medium businesses will be eligible to benefit.

Employees will have to work at least a third of their usual hours (33 per cent) to qualify. Employers will pay for the hours their employees have worked, an additional third of the remaining ‘usual’ hours that are not worked, with the Government putting in a further 1/3 of the hours not worked. A cap to the Government’s support will apply, at £697.92 per month.

Importantly, the Job Support Scheme is open to all employees – not just those who were previously furloughed.

As a practical example, if an employee works 33 per cent of their usual hours, they will receive 77 per cent pay in total (the combined contribution from their employer and the Government).

Jenny Hawrott with Matthew Clayton

What will the Job Support Scheme mean for employers?

Employers who were considering the prospect of making employees redundant due to reduced demand, will doubtless welcome the news of the scheme. However, while it may reduce the need for redundancies in some cases, it will not be able to help everyone; the scheme is only designed to maintain ‘viable’ jobs. Where employees can’t work at least a third of their normal hours, redundancies may still be needed.

A sticking-point for some employers is that they will be paying for more work than they are receiving. For example, they will pay for 33 per cent of normal hours, but also for a third of time not worked.

Time will tell if the Chancellor’s measures will be enough to keep levels of employment as healthy as they can be over the winter.

Further guidance is expected over the coming week.

A factsheet provided by the Government can be accessed here.

We’re here to help

We appreciate that it is a confusing and uncertain times for employers, but we’re here to help.

Our employment law team is fully equipped to advise you on your rights and obligations in this most unusual situation and how best to implement this guidance across your workforce.

Our legal services are operating as normal, with all of our lawyers able to work safely from home.

Please call 01242 514000 or email Jenny Hawrot in our employment law team and we will be delighted to help.