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THE government will cover up to a third of workers’ wages if their hours have been reduced due to the coronavirus crisis.
Rishi Sunak hopes the Jobs Support Scheme will reduce the millions of job losses expect when the furlough scheme ends.
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The Chancellor announced the changes as part of his wider Winter Economy Plan in the Commons this afternoon.
Other measures in the support package include pushing back the deadline for the business loan support schemes and an extension to the VAT cut for the hospitality industry until March 2021.
The Prime Minister said the UK is “undoubtedly” facing a second wave of Covid-19 cases as hospital admissions are now doubling every week.
So far, the government has held off from closing businesses again but warned that stricter measures are on the way if current rules fail to slow down the rate of infections.
Can I be made redundant if I’m on furlough?
EVEN though furlough is designed to keep workers employed, unfortunately it doesn’t protect you from being made redundant.
But it doesn’t affect your redundancy pay rights if you are let go from your job amid the coronavirus crisis.
Your employer should still carry out a fair redundancy process.
You will be entitled to be consulted on the redundancy lay-off first and to receive a statutory redundancy payment, as long as you’ve been working somewhere for at least two years.
How much you’re entitled to depends on your age and length of service, although this is capped at 20 years. You’ll get:
- Half a week’s pay for each full year you were under 22,
- One week’s pay for each full year you were 22 or older, but under 41,
- One and half week’s pay for each full year you were 41 or older.
Sadly, you won’t be entitled to a payout if you’ve been working for your employer for fewer than two years.
There should be a period of collective consultation as well as time for individual ones if your employer wants to make 20 or more employees redundant within 90 days or each other.
You are also entitled to appeal the decision by claiming unfair dismissal within three months of being let go.
If you’re made redundant after your company has gone into administration you can claim redundancy pay via Gov.uk.
There are fears that extra restrictions will have a devastating affect on the current economic recovery and even cause it to crash again.
The government is yet to announce further details on the support package but they are expected later this week.
For now, here’s everything you need to know:
Who can get the extra help?
The government says the Job Support Scheme will help businesses keep workers’ employed throughout winter when trade typically drops.
It will mean that employees can stay in a job on shorter hours rather than being made redundant.
To be eligible, employees must be working at least a third of their contracted hours and be paid for those hours in full by their employer.
The government will then cover two thirds of the pay they have lost from reducing their hours.
Mr Sunak didn’t outline whether there would be a cap on the amount the government will cover.
Anyone who is in employment as of yesterday, September 23, can be put on the scheme.
Employers who take advantage of the scheme can also claim the Jobs Retention Bonus worth £1,000 if they keep staff in work through to January 31, 2021.
How can I apply?
It’s not yet clear how workers can apply for the extra help but if it’s anything like the furlough scheme, they won’t have to do anything.
Employees were put onto furlough by their employers, who would then pay up to 80% of their salaries.
The employers were then able to claim back the portion of wages from the government through their HMRC portal.
Before being rolled onto the scheme, employees had to give their consent.
The scheme closed to new applicants on July 4. Since then, furloughed workers were allowed to be brought back part-time.
Employers have to pay staff in full for the hours they work and the government covers a portion of the wages for the contracted hours they were furloughed for.
To be eligible for the scheme before, staff were not allowed to carry out any worker for their employer.
When will furglough end?
The furlough scheme has been wound down since July and is due to end completely on October 31.
When it first launched back in March, the government covered up to 80% of staff salaries plus their national insurance and pension contributions.
It was then up to employers whether they topped up employees’ salaries to 100%.
From August, companies were asked to pick up the tab for the national insurance and pension contributions, while from September the government subsidy dropped to 70% of wages.
The amount covered by the state will fall again from October 1 to 60% before the support is withdrawn completely at the end of the month.
The ending of the scheme is expected to spark mass redundancies as businesses look to shed overheads as they battle to survive.
Trade unions and organisations have been urging the government to rethink plans to end the scheme to avoid a second wave of job cuts.
More than 430,000 jobs have been lost as a result of the pandemic, mainly on the high street and travel industries.
Both sectors have been hit the hardest by lockdown and restrictions to limit the spread of the virus.
From today, pubs have been slapped with a 10pm curfew that could last up to six months.
Meanwhile, Premier Inn has announced it will axe 6,000 jobs as a result of the pandemic.
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