UPDATE - The Extension of the Job Retention Scheme

UPDATE - The Extension of the Job Retention Scheme

On Saturday 31 October 2020, the UK Government announced that England would enter national lockdown on 5 November 2020 and as a result, the Coronavirus Job Retention Scheme (or the "Furlough Scheme") has now been extended until December 2020 (although an exact date has not been specified). Greenaway Scott will consider what this means for the new Job Support Scheme ("JSS") and next steps for employers.

What effect does the extension of the Furlough Scheme have on JSS?
The UK Government has confirmed that due to having to place England into a national lockdown from 5 November 2020 until 2 December 2020 (although further announcements have been made indicating that the lockdown may continue past this date), the Furlough Scheme has now been extended in England from 1 November until December 2020. It is anticipated that the Furlough Scheme will be extended for all UK countries but this has yet to be confirmed.

To avoid having two job retention schemes running alongside each other, the UK Government has postponed JSS until the Furlough Scheme has come to an end. The effect of this is that employees will receive 80% of their salary (capped at £2,500) from the UK Government, with employers continuing to pay National Insurance contributions (NICs) and pension contributions. This means that the UK Government has returned to its contribution position from August of this year, as opposed to its 60% contribution that was introduced at the beginning of October 2020.

In addition, employers who had previously opted for the JSS Open (where an employer's business remains open and employees work at least 20% of their hours) and JSS Closed (where an employer's business remains legally closed so employees are unable to work) will need to place their employees on the Furlough Scheme until it comes to an end and JSS comes into force in December 2020.

Who is eligible to claim for the Furlough Scheme?
The UK Government has confirmed that employees who were on an employer's PAYE payroll before midnight on 30 October 2020 can be placed on the Furlough Scheme. Practically this means that an employer notifying HMRC of an employee's payment status by means of a Real Time Information (RTI) submission would have needed to have submitted it on or before 30 October 2020.

Is Flexi-Furlough still an option?
Employers are still able to use the Flexi-Furlough Scheme if they wish. This means that employees can continue to work part-time hours whilst being paid their usual salary (based on reduced hours) and the UK Government contributing to unworked hours.

Next Steps
The following steps should be taken (dependent on the position of the employer):

  • Subject to what has already been agreed previously, employees who are already on the Furlough or Flexi-Furlough Schemes will need to be advised that the business wishes to keep them on Furlough and seek written consent from employees that they accept remaining on Furlough until December, on their existing furlough pay (and hours if applicable).
  • Employers who already have JSS agreements in place with employees will need to seek their written consent to being furloughed until it comes to an end in December 2020.
  • Employers who did not have any employees on the Furlough Scheme prior to 30 October 2020 will need to seek written consent from employees to be placed on Furlough/Flexi Furlough until December of this year.

We will of course be providing updates as and when we receive more information.

The information contained in this article is for information purposes only and is not intended to constitute legal advice. Should you require support and assistance on the employment law implications of the COVID-19 pandemic, the support available for businesses and HR queries, our experienced advisors will be able to provide practical advice to support your business through the process. For advice, contact our employment & HR team at employment@greenawayscott.com or call us on 029 2009 5500.