Expert interpretation of the government’s new job support scheme has been provided by Thursfields Solicitors.
The leading Midlands law firm is offering businesses detailed support if they want help on how to save jobs once the current furlough scheme ends on 31 October.
Helena Morrissey, director of Employment at Thursfields, explained that the new scheme was available to all small and medium-sized employers, but that larger businesses might face financial assessments to prove that COVID-19 had directly reduced their turnover.
Ms Morrissey said: “The pandemic is going to be with us for some time, and so we welcome the government’s new job support measures to help preserve some jobs when the current furlough scheme ends.
“The emphasis is, however, on some jobs. Chancellor Rishi Sunak has stated that he cannot save all jobs, only those that are viable, and exactly how this is to be interpreted remains to be seen.
“The initial government guidance is that the scheme is applicable to businesses who can keep going over the winter months, but who are facing reduced levels of trade.”
Ms Morrissey noted that this might make the new scheme of little value to employers in certain sectors such as conferences and events, sporting venues, nightclubs and parts of the travel industry, where there are little or no prospects of reopening this winter.
She said: “Individuals unlucky enough to be employed in such businesses could find themselves without any further job protection come November.”
But on the bright side, Ms Morrissey highlighted how the scheme could work for businesses whose staff can genuinely begin to return to work in November, albeit on a part-time basis.
Employees, she said, must work and be paid by their employer for a minimum of a third of “normal” hours, with the bill for the remaining two thirds of hours effectively split three ways between the employer, the employee (via reduced wages) and the government (capped at £697.92 per month).
Ms Morrissey said: “This does mean, however, that employers are paying a premium for hours actually worked.
“For example, employers will have to pay 55% of normal wages for an employee only working a third of their normal hours (i.e. 33% for hours actually worked and 22% for their share of paying for unworked hours).
“And two employees working half their normal hours will cost around a third more than one full time equivalent. It remains to be seen, therefore, whether many employers will actually want to pay this uplift on wages.
“The scheme will run for six months, but the government may increase the minimum hours threshold from 33% to a higher percentage after three months. It is possible to rotate employees on and off the scheme, but each claim period must be a minimum of seven days.”
Ms Morrissey also explained that the new scheme cannot be used to support the wages of any employee served notice of redundancy, nor can employees be made redundant when they are being supported by the scheme.
She said: “It is well worth remembering that this scheme is only one of a number of options that businesses should be considering when trying to identify alternatives to redundancy.
“Employers could consider offering career breaks, sabbaticals or job shares, for example, or if they have the contractual right to do so they could re-consider ‘normal’ short-time working or lay-offs.
“Employees may also be willing to voluntarily agree to reduced pay, possibly in return for some other incentive, such as more flexibility.”
Ms Morrissey added: “What is clear is that flexibility will be at the heart of any successful job-saving strategy, both on the part of the employer and the employee.”
Employers who need advice on the latest government job support scheme, redundancies or any other employment law issues can contact Ms Morrissey for a free initial consultation at firstname.lastname@example.org or call her on 0121 726 8781.