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Changes to government support from 1 November 2020
The Coronavirus Job Retention Scheme (CJRS) is due to end on 31 October 2020. Understandably, both employers and employees have a lot of concern about what will follow. On 24 September 2020, the Chancellor announced a new scheme called the Job Support Scheme (JSS). The JSS will start on 1 November 2020 and run for six months until 30 April 2021.
This is a less generous scheme. Whilst government support will still be provided, employers will need to contribute more. The scheme’s rules (at the time of writing) are that the UK Government will pay a proportion of workers’ salaries where the worker has had their hours reduced but are working at least one third of their usual hours. The employer will pay in full for the hours worked. For the hours not worked, the employer will be required to pay
one third of the pro-rata salary, and the Government will pay another third. This means employees are guaranteed to earn a minimum of 77% of their wages.
A further advantage for employees is that under the scheme, they cannot be given notice of redundancy or be made redundant. For employers, if they have made use of government loans, they have an extension of time to repay them. For the first three months, the employees on the scheme must work a minimum one third of their usual hours. After the third month, the government may consider increasing the minimum hours worked requirement.
Employers wishing to make use of the scheme must agree the new short time working arrangements with their employees (or workers), which will involve making changes to the employment contracts and notification must be made in writing. HMRC may request to see the notification.
The workers or employees must have been on the payroll on or before 23 September 2020. Employers using the JSS can claim the Job Retention Bonus if they meet its eligibility requirements while using the JSS. The pattern worked by the employees or workers does not have to be the same each month, but the pattern does have to cover a minimum of seven days. The employees and workers do not have to be on the JSS all the time. The government expects participating companies to not pay out dividends or operate share buybacks while using the scheme.
The JSS does have its disadvantages. There are additional costs for employers. These include the requirements to pay the National Insurance Contributions and pension contributions, and of course the amount of salary the employers pay is higher than under the CJRS. This is a possible disincentive to use it. For example, it could cost an employer £1,500 to employ one full-time worker on £17k but more than £2,000 for two part-time workers on same full-time salary.
Furthermore, larger businesses will need to show HMRC that their turnover has decreased due to the pandemic and meet a financial assessment test. Small to medium sized businesses do not need to meet this test. The requirement for the employee or worker to have been on the payroll over a month before the JSS starts may also hinder recruitment. Finally, the JSS is paid in arrears, at the end of the working month. This may affect cashflow for employers.
Employers will need to carefully weigh the costs of the JSS before deciding whether to participate. The scheme does come at a cost but may provide just enough support to keep your companies going during this difficult time.
Practical issues after furlough
Employers often ask about what discretion they may have when it comes to annual leave, especially when several employees may want time off around the same periods. An employer can require their workers to not take annual leave on specific dates if it has not already been booked.
Even if the leave has been booked, it is possible to cancel it at the employer’s discretion (and the employer should check the contract of employment for any relevant clauses). However, if the leave has already been granted, the employer should be cautious about cancelling it, particularly at short notice, as it is clearly an unpopular move. If the worker or employee had made plans and booked travel, courses, or incurred other expenses, they may look to their employer to reimburse any lost monies that cannot otherwise be refunded.
The employer should also be aware that unreasonably cancelling holiday plans at short notice could give rise to an allegation from an employee that the employer’s conduct has breached a fundamental part of the employment contract – the implied term of mutual trust and confidence between the employed and the employer.
This means the worker could resign and claim constructive dismissal. It is highly advisable to agree (rather than impose) changes to leave and allow as much notice as possible. Business and operating constraints may limit how feasible this is, but it is best to be as conciliatory as possible (within reason).
Refusal to return to the workplace If an employee is concerned about COVID-19 and does not want to attend work, allowing the employee to work from home, if possible, may well resolve the issue. Of course, for many positions in the landscaping industry, this may not be practical.
So, an employer would need to consider the current public health advice, the specific reason that the employee is concerned about attending work (including the commute) and whether it would be discriminatory to refuse home
working, take disciplinary action, or withhold pay in light of the employee’s refusal.
Any disabilities or similar issues affecting the employee or worker must also be taken into account; particularly those that may exacerbate vulnerability or fears about the pandemic (for example, an employee with severe anxiety).
If there are no concerns about potential discrimination and the advice on public health means that the employer can reasonably require staff to come into to work, an employer is entitled to require the employee to attend the workplace; if the employee refuses, the employer is able to start disciplinary proceedings.
The misconduct would relate to refusal to follow reasonable instructions from management and unauthorised absence. The employer should carefully follow their disciplinary procedures and keep an eye on any relevant clauses in the employment contract.
It would also be best to avoid hasty reactions to a refusal to come to work, whether or not it appears reasonable on the surface. The employer should be aware that the specific employee or worker’s colleagues will very likely be aware of their colleague’s situation and the employer’s reaction.
An unnecessarily open acceptance to refusals to come into work may not play well on those who have come in; on the other hand, an overly harsh reaction will likely affect morale.
The information in this article is correct at time of writing. Due to the scheme continuously evolving, it may have changed after publication.
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