Unpicking the Job Support Scheme

Orchard Employment Law provide answers to some frequently asked questions.

Both Employers and employees have been concerned about the future of jobs once the Furlough scheme ends on the 31st October so it is no surprise that people were eagerly awaiting the announcement of the new job support scheme. 

We bring you answers to some frequently asked questions.

What is the Job Support Scheme in a nutshell?

This scheme will allow employers to reduce staff hours and to claim some monies from the government.

All small and medium businesses will be eligible to use the scheme but large businesses will only be able to claim if they can show that their turnover has reduced as a result of the pandemic.

How many hours must an employee work to be eligible for the scheme?

Under the new scheme the employees work at least at least one third of the employees normal hours. The minimum hour requirement might increase after January 2021.

What will I have to pay as an employer?

As an employer you will be required to pay national insurance and pensions. You will also have to pay 100% of the hours which the employee works.

You will also have to contribute towards the hours which the employee does not work. Your total contribution will vary depending on the percentage of time the employee works. The total minimum contribution from an employer (including hours worked) will be 55% but it could be as much as 80%.

Just as with furlough, it is likely that the employee will be on a reduced salary on the job support scheme.

Can I use the scheme on a new employee?

Employees who been employed on of after the 23rd of September 2020 are eligible for the scheme.

What if the employee has not been furloughed in the past?

There is no requirement for the business to have used furlough in the past or for the employee to have been furloughed before.

Can I rotate staff on the scheme?

Yes, you can rotate staff  on and off the job retention scheme but they must be on the scheme for a minimum of 7 days at a time.

Is there an automatic right to put an employee on the scheme?

No, as this will be a reduction in wages you will need to check your contracts to see whether or not you have the right to reduce pay. If you do not have the right to reduce pay you should negotiate with your staff and have a written agreement for them to be on the scheme. We recommend you take advice on this so as not to end up with a claim against you.

You should also have clear and transparent reasons as to who is put on the scheme and who isn’t. You are still required to follow UK employment laws and this means not discriminating against people.

Will I still be able to make redundancies if I use the scheme?

You will still be able to make redundancies but you cannot use the scheme during the notice period. Employees should receive their full redundancy and notice pay (pre furlough and job support scheme.

Do I have to use the scheme instead of using redundancies or lay off?

No, there is no obligation for an employer to use the job support scheme.

Can we contact you for support?

Yes, we provide advice and support to employers  with all HR and Employment Law matters. You can contact us at www.orchardemploymentlaw.co.uk

The Furlough Scheme Is Ending. What Are My Options?

The government’s Coronavirus Job Retentionsion Grant also known as the Furlough Scheme has been a welcome gift to both employees and employers across the UK. It has meant that businesses have been able to keep staff in jobs which will help some businesses to recover to full health.

The option to have staff return to work on a part-time basis will also be a great resource for many but we know that it is coming to an end in October 2020.

Businesses will need to start thinking about how they rebuild the business in an economic landscape which has changed rapidly over the last 4 months. The goal will be to protect the business so that it can be restored and save some jobs. We will take a look at some options that you may want need to consider:

  • Reduced Hours also known as Short Time Working

In an ideal world business would bounce back in an instance and everyone would return to work on full hours and full pay. If a full quota of staff is not an option for the business you may consider reducing the hours of some or all staff members.

In order to reduce staff hours you must have the contractual right to do so. This would be stated in the Employment, Worker contract or in another document. If you do not have a contract you will need to negotiate  with staff and create a new agreement or agree to amend the existing agreement. This must be done in writing and staff should be made aware of their right to claim redundancy if the reduced hours continue for a period of time. Staff will want assurances that if they are made redundant in the future will be based on their original pay and hours.

Do ensure that you are not acting in a discriminatory way if you are reducing the hours of some staff.

Always seek advice before reducing hours.

  • Lay-off with no or limited pay

Some contracts allow an employer to place an employee on standby without pay. A lot of furlough agreements also sneakily added this right into the contract. With this option staff receive no pay other than guarantee payments of £29 per day for 5 days within a 3 month period. Staff also have the right to request redundancy after a period of time and it is important that the correct procedure is followed. Failure to do this correctly can be very costly to a business.

  • Redundancy

Redundancy is where a role has significantly reduced or disappeared. It is about the role and not the person and so employers must think about placing all those who do a particular role at risk. 

Staff should not be discriminated against and the correct monies should be paid. 

It is worth noting that there is no redundancy pay for staff who have less than 2 years service. They will still be entitled to notice pay and other outstanding payments such as unused holiday. 

For businesses who will be making 20 or more redundancies within a 90 day period. There is a strict procedure which must be followed so employers really need to think ahead. One of the things they need to think about is timing as the process will be a minimum of 30 days for business making between 20 and 99 staff members redundant. For business making over 100 redundancies within a 90 day period there must be a consultation period of at least 45 days.

There will be instances where putting a settlement agreement in place is the best way of protecting the business.

  • Restructure

This is similar to a redundancy. This may be where the role still exists but you may decide that it can be done differently or absorbed into another role. In this instance staff should be consulted and just like any other dismissal they will be entitled to notice pay.

If you would like advice or support with any of the options above or for guidance with any Employment Law or HR matter please feel free to contact us at info@orchardemploymentlaw.co.uk

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