Last reviewed 19 October 2020
On 20 March 2020, the Government announced its plans for financial assistance, called the Job Retention Scheme, to help employers retain staff for an extended period of time due to the impact of the coronavirus pandemic. The scheme was aimed at avoiding lay-offs or redundancies where employers were unable to offer work to their employees.
On 29 May 2020, the Chancellor, Rishi Sunak, confirmed that the scheme would end on 31 October 2020 which begs the question: what options are open to employers after this time? Opeyemi Ogundeji, researcher and employment law writer at Croner-i, explores this in more detail below.
Job Support Scheme
Chancellor Rishi Sunak announced on 24 September that a brand new “Job Support Scheme” will be implemented to replace the Job Retention Scheme after it ends. The Government aims to continue to provide financial assistance to those who are retained in work through this new scheme.
The scheme will allow employers to keep staff in “viable jobs” at shorter hours rather than making them redundant. Employers should note that this scheme is not an extension of the furlough scheme but rather a replacement of it.
To find out more about the Job Support Scheme, refer to our article: Job Support Scheme — FAQs.
Job Retention Bonus
Rishi Sunak released his “Plan for Jobs” initiative on 8 July 2020 to set out how the Government will support economic recovery in the UK. One of the elements included was a new Job Retention Bonus (JRB). It is being implemented to provide additional support to employers who retain their furloughed employees into meaningful employment after the Coronavirus Job Retention Scheme ends on 31 October 2020.
It is a one-off, taxable, payment of £1000 for every furloughed employee retained which can be claimed from February 2021. All employers who furloughed staff are eligible for the JRB including recruitment agencies and umbrella companies.
In order to benefit, employers should ensure that they have:
complied with their obligations to pay and file PAYE accurately and on time under the Real Time Information (RTI) reporting system for all employees
maintained enrolment for PAYE online
a UK bank account.
There does not seem to be a limit on the size of employer who can claim the bonus at this stage which means that as far as the current guidance goes, big or small organisations can apply for the bonus. There also does not seem to be a limit on the number of employees that can be claimed for; however, employees must be eligible for the Job Retention Scheme to qualify for the JRB, along with other eligibility criteria.
Claims for the JRB will be able to be made for both full-time and part-time employees. Further guidance on how to make a claim is expected in January 2021.
Reduction in hours
Employers may want to make structural changes to their workforce if possible, such as reducing the number of hours that their employees have to work, bringing them back on a part-time basis.
Employees need to agree to this change as it will impact on the terms and conditions of their current contracts. Most importantly, employees cannot be forced to reduce their hours, but communicating with them about its necessity if the company is under financial strain, may persuade them into forming an agreement — employees are likely to choose job security over redundancy, even if it means a reduction in their hours which subsequently affects their pay.
Employers should be warned that attempting to enforce this without an agreement could lead to constructive dismissal claims if the employee is forced to resign.
Lay-off and short-time work
Lay-off and short-time working, otherwise known as “LOST”, is usually considered as an alternative to avoid compulsory redundancies when there is a downturn in workload or the finance necessary to fund full-time employment, especially in light of the coronavirus outbreak. In practice, lay-off is where the employer asks their employees to stay at home and not attend work. Short-time working is where their hours are reduced on a temporary basis to at least half their normal working time.
Employees may be placed on unpaid LOST where there is a contractual term entitling employers to do so; however, they may still be entitled to statutory guarantee pay of £30 per day for a maximum of five days. In the absence of such a contractual clause, employers will need to agree this with staff, otherwise it will breach the employees' contracts of employment. If there is no express or implied contractual term entitling the employer to place employees on unpaid LOST, the employee will be entitled to full pay even when they aren't working.
If one area of a business no longer requires either all, some, or most staff, then employers can redeploy them elsewhere — either temporarily, or permanently.
Employers must give their staff reasonable notice of redeployment, give them the opportunity to review the new role to assess their own suitability, and offer relevant training where necessary.
If staff are working from home when the redeployment is agreed, employers will need to determine the employees' suitability to return to the office if the new role cannot be done from home, or if the employee will be required to continue to work from home.
To aide employers' decisions, it was announced by the Prime Minister on 22 September that office workers who can work effectively from home should do so. Boris Johnson also says that people who work in the public sector in essential services, including education settings, should continue to go into work where necessary and anyone else who cannot work from home should go to their place of work where it is Covid-secure.
This is intended to be the advice until March 2021.
Employers should consider if there are alternative measures that could be utilised to reduce the need for redundancies as this should be a last resort option.
It can be useful for an employer to reduce compulsory redundancies by accepting volunteers. This can have the advantage of allowing those who want to leave to do so and can be more palatable to staff. However, employers should:
avoid committing to accepting them as there is a risk of losing those with skills employers wish to retain
define the selection process if more staff come forward than required
avoid having a policy of not re-hiring anyone who takes voluntary redundancy (as this can also be indirectly discriminatory).
Employers should keep in mind that the furlough scheme will be coming to an end on 31 October and should therefore consider first that it may be possible to rely on the new Job Support Scheme, or other alternatives, before relying on redundancy.