When Chancellor Rishi Sunak created his Job Support Scheme (JSS) to supersede the Coronavirus Job Retention, or furlough, scheme (CJRS) from the 1st November, he was clear that its intention was to protect “sustainable jobs”. The message was that the furlough scheme could not run indefinitely to prop-up jobs that would eventually be lost anyway.
The Coronavirus second-wave and ensuing “Lockdown 2” forced a massive U-turn by the Government and at the 11th hour the furlough scheme was re-instated, subsidising wages at the 80% rate as when it was originally introduced in March. Another feature of the original scheme was that those who had been laid off or made redundant when Covid-19 first hit, could be re-instated and furloughed; and this has so far been the case in the latest iteration of the Furlough scheme. If you made employees redundant, or they stopped working for you on or after 23 September 2020 you can re-employ them and put them on furlough provided they were on your RTI submission to HMRC between 20 March 2020 and 30 October 2020.
However, there are signs that this is about to change.
As usual, final and definitive guidance has yet to be issued by the Government but, in the spirit of the JSS of subsiding only those jobs that have a truly feasible future, it looks as though employers will soon lose the ability to use the scheme to pay those who are serving notice.
The latest official notification states “The government is reviewing whether employers should be eligible to claim for employees serving contractual or statutory notice periods and will change the approach for claim periods starting on or after 1 December 2020, with further guidance published in late November.”
In other words, there will be a review as to whether employers will be able to claim furlough grants for anybody who is put on or serving notice of redundancy after 1st December. Therefore, employers may have to fund redundancy notice payments which they may currently think will be covered by the furlough scheme.
Because a reasonable consultation period is part of any redundancy process, the delay in issuing the final guidance may be a subtle attempt to avoid a tidal wave of redundancy announcements as employers rush to beat the December 1 deadline. Ten to fourteen days is generally seen as reasonable for redundancies of just a few so this information seems interestingly timed. But as all claims after 1st December may be affected, it probably won’t help.
With a record budget deficit, largely incurred by the generous furlough scheme, it’s understandable that the Chancellor doesn’t want to throw good money after bad. If indeed a position has no future then should the Government really be propping it up at taxpayers’ expense?
The announcement of a potential Covid vaccine this week has lent an air of optimism to the current situation so if the light at the end of the tunnel is slowly coming into view, perhaps this is the fist step in a change of approach by the Government that shift responsibility back towards employers.
Of course, there’s been no official announcement yet, so this could just be us reading between the lines. But if you’re still debating whether you should be making any redundancies, perhaps now is the time to have a discussion with us. Call on 0452 331331 or e-mail This email address is being protected from spambots. You need JavaScript enabled to view it.
