The New Job Support Scheme – will it prevent redundancies?

The Government has announced a new Job Support Scheme (JSS) which will commence on 1 November 2020, as the Coronavirus Job Retention Scheme (the “Retention Scheme”) comes to an end. JSS will take a much different format to the Retention Scheme, and although the JSS will offer some support to the prevention of redundancies, it may not necessarily be as effective as its predecessor.

What is it? It is designed to protect those jobs that are at risk due to facing lower demand over the winter. The employee works at least a third of their normal hours. The Government will then pay for a third of the hours not worked, with the employer also contributing a third. This means that the employee will be paid less than their normal wage, but will be paid for more hours than they are working.

Example If you were to work 40% of your normal shifts, the employer would pay for this.

The Government then pays for a third of the hours not worked, which would be 20% in this scenario (1/3 of 60% = 20%). The employer also has to pay for a third of the hours not worked, so 20%.

This means than you would be paid 80% of your normal wages.

Will it prevent redundancies? As you will see from the example, the employer is not actually receiving much assistance from the Government in keeping the job there where there is no work for the employee to do. If there is no work, and therefore no funds coming into the business, the employer will likely have to look at making redundancies.

Even when there is work to do, to be eligible for the scheme the employer has to put the employee on less hours than they are paying for, so from that point of view it isn’t advantageous to an employer.

In our expert opinion, we do not see that this scheme will prevent many redundancies, however it is understandable that after paying out so much money through the course of the Retention Scheme, the Government needed to find a compromise.

We hope that it does work to prevent redundancies, however if you find yourself in a position where you are being made redundant, do not hesitate in getting advice to ensure that the figures involved and procedure followed are correct. If you need advice, please contact Ian Winrow on 01286 872779 who will be able to help.

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