As the Government’s furlough leave scheme is set to come to an end on 31 October 2020, the Chancellor published new measures on 24 September 2020 to support employers to retain jobs that should be viable after the pandemic and to avoid redundancies. This new Jobs Support Scheme allows organisations to keep people in work on shorter hours in lieu of making them redundant.
Under the Scheme, which will run for six months from 1 November 2020, employees will be required to work and be paid for at least one-third of their normal hours. For every normal hour not worked the employer and the Government will each pay one third of the employee’s usual pay, but with the Government contribution capped at £697.92 per month.
After three months the Government will review the minimum of 33%. The employer will pay the Government’s contribution initially and will then be reimbursed by the Government.
Neither the employer nor the employee needs to have previously used the furlough scheme and employees can vary their hours from month to month as long as every short-time working arrangement lasts for at least seven days.
Unlike the furlough scheme the Government will not cover employer National Insurance payments or pension contributions nor can employees be put on notice of redundancy or serve their notice under the grant.
Organisations must agree the short-time working arrangements with employees, make any changes to the employment contract by agreement and notify the employee of the change in writing. HMRC may request sight of the agreement so record keeping will be vital.
All small and medium-sized businesses are eligible. Larger businesses will be eligible if they can demonstrate that their business has been adversely affected by the pandemic through a financial assessment test.
The Scheme is open to all employees on the payroll on 23 September 2020 unless they have been made redundant or are on notice of redundancy. We expect further guidance on the Scheme to be published shortly.