Furlough 2.0? The Winter Economy Plan 2020

/ employment

On Thursday 24th September, the Chancellor of the Exchequer announced the Winter Economy Plan, amid concerns over what would happen to the estimated 5.3 million people still on furlough. 

The new Job Support Scheme is not a direct replacement for, or continuation of, furlough.  It is aimed to get workers back into the workplace.  The current furlough scheme supports employees who may not be working at all (or may be working part time under the ‘flexible furlough’ scheme), whereas the Job Support Scheme is only available where there is a reduced demand for work i.e. the worker must be doing some work in order to qualify.

The key points of the scheme are as follows:

  • The Scheme will come into force on 1 November 2020 (the current furlough scheme ends of 31 October 2020).

  • The Scheme is open to employees, with a UK bank account and a UK PAYE scheme, even if they have not been previously furloughed.

  • Employees will need to work one-third of their usual hours in order to qualify – the Chancellor emphasised that not every job can be saved i.e. those where there is no demand for the employee to work.

  • For each hour the employee does not work, the Government will pay one-third of their usual pay.  The government has not yet clarified, but we understand this to be pre-furlough pay for employees who have reduced their salary under a furlough agreement.

  • The Scheme is open to all Small and Medium-Sized Enterprises (SME’s) and larger businesses, if the larger businesses can show that their business has been adversely impacted by Covid. 

Whilst no formal clarifications have been made, it is likely that, as with the furlough scheme, this scheme does not override employees’ existing employment rights, such as the right to work if they are ready and available to do so.  It is therefore important that all changes to working hours/terms and conditions are properly agreed and recorded in writing.  It is also likely that claims under the Scheme may be subject to audit, and employers are therefore reminded that they should keep appropriate records of agreements

If you have any queries regarding the Job Support Scheme, or any other query relating to Coronavirus measures in the workplace, please get in touch with Charlotte Braham in the Employment Department on 01494 893529.