Expert Insights

Expert Insights

Job Support Scheme

The Chancellor today announced his Winter Economy Plan, which includes the outline of the new Job Support Scheme (JSS) which will replace the Job Retention Scheme from 1 November 2020 and run for six months. Whilst full details have not yet been published, what we do know is:

  • To qualify for the new JSS  employees must:
    • Be on the employer’s PAYE payroll on or before 23 September 2020.
    • For the first three months of the scheme, they must work at least 33% of their usual hours and be paid their normal contracted wages for that time.
    • After three months, the Government will consider whether to increase this threshold.
    • Employees can move on and off the scheme and do not have to work the same pattern each month, but each short term working arrangement must cover a minimum period of seven days.
  • For the unworked hours, the employer and Government will each pay one third of the lost pay (the Government contribution will be capped at £697.92 per month). Workers should therefore receive at least 77% of their usual salary (subject to the cap).
  • “Usual wages” calculations will follow a similar methodology as for the Job Retention Scheme.
  • Employees cannot be made redundant or put on notice of redundancy during the period within which their employer is claiming the grant for that employee.
  • Employers must agree the new short-term working arrangements with staff and “make any changes to the employment contract by agreement, and notify the employee in writing”.
  • The scheme is open to all businesses, even if they have not used the furlough scheme to date.
  • Small and medium businesses are automatically eligible, but larger businesses will only qualify if their turnover has fallen due to the pandemic. In order to see if they are eligible they will be subject to a financial assessment test, details of which are not yet available, but the Government has made clear that “our expectation is that large employers using the JSS will not be making capital distributions, such as dividend payments or share buybacks, whilst accessing the grant.”
  • Employers will be able to apply for  the JSS as well as the retention bonus previously announced.

There are some key areas that need clarifying, which will hopefully be dealt with in the forthcoming guidance and legislation:

  • How will a “viable” job be defined? It may simply be considered viable if no notice of redundancy is given.
  • What factors will determine whether larger businesses are eligible to apply?
  • If redundancies become inevitable despite this scheme, will that mean any payments received under it will need to be repaid? The implication from the initial guidance is that notice of redundancy will prevent further claims, but will not trigger repayment of earlier claims.

The latest Government factsheet is available here and we will, of course, update you as more detail becomes available.

For more information, please contact Trevor Bettany or your usual Charles Russell Speechlys contact.

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