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Coronavirus – Employment Law Update

02 October 2020

With no end in sight for the coronavirus pandemic and the prospect of increasing infections and disruptions, we look at the latest employment law developments.

Job Support Scheme

The UK-wide Job Support Scheme (JSS) was announced last week and is being introduced with effect from 1 November 2020, immediately after the Coronavirus Job Retention Scheme (CJRS) or “furlough” scheme ends. This puts an end to many weeks of speculation about what (if anything) would replace the CJRS in an effort to head off a feared “tsunami” of redundancies.

The purpose of the JSS is to support “viable” UK employers who face lower demand due to COVID-19, and to keep their employees working. The JSS will run initially for 6 months. Some fairly general guidance on the scheme is available from the government: click here.

Here are the key issues:

1. Employees will need to work a minimum of 33% of their usual hours (the minimum 33% threshold hours may be increased in months 4-6 of the JSS). It is not yet clear at what date the “usual hours” will be judged, and that will be a critical issue if some employees have already reduced their “normal hours” due to the pandemic.

2. For every hour of their normal hours which is not worked, the employer and government will each pay one third of the employee’s usual pay (but the government’s contribution is capped, so it may not total two thirds of usual pay in each case). Interestingly the government guidance states that it is expected that employers “cannot top up their employees’ wages above the two thirds contribution at their own expense”. This needs further clarification, but it suggests that employees will have to share the pain with the employer.

3. The government contribution will be capped at £697.92 per month.

4. Employers will be able to make a claim online from December 2020. The employer will be reimbursed in arrears for the government contribution, in respect of payments the employer has already made.

5. The employee must not be given notice of redundancy during the period of the JSS payments (which contrasts with the position under the CJRS).

6. The employee does not have to have been furloughed previously under the CJRS to participate in the JSS.

7. Employees must have been on the employer's Real Time Information submission on or before 23 September 2020.

8. All Small and Medium-Sized Enterprises (SMEs) will be eligible.

9. Reduced hours arrangements must be agreed with staff, varying the employment contract by agreement if required, and there must be written notification to staff.

10. Working patterns can vary, and employees can come on and off the scheme, but each short time working arrangement must cover a minimum period of seven days.

11. The grant will not cover Class 1 employer NIC or pension contributions - these remain payable by the employer.

12. Employers using the JSS will also be able to claim the Job Retention Bonus if they meet the eligibility criteria.

13. HMRC will check claims and can require the employer to provide a copy of the written notification issued to staff. It is estimated that up to £3.5bn paid under the CJRS has been fraudulent or paid in error, and HMRC will be looking to reduce the level of wrongful claims. HMRC state they will inform employees direct about the claim (given the evidence that some employers claimed furlough payments under the CJRS without telling their staff anything about the scheme, and while the staff continued to work).

There does seem to be an element of pessimism in terms of how successful this new scheme will be in preventing mass redundancies, but time will tell. Employers using the scheme will be required to pay staff (in part) for hours not worked, and in some cases, redundancy may seem to be the better option. Indeed it is clear that in terms of ongoing cost (before factoring in redundancy costs) it is cheaper for an employer to retain 1 employee on 100% of hours (and not use the JSS) than to retain 2 staff on 50% of hours under the JSS.

As ever, the devil is in the detail and we await the detailed rules from the government in due course.

New offences

For employers operating in England, there are new offences to be aware of:

An employer cannot now knowingly permit a worker (including an agency worker) to come to work if the individual is self-isolating. This includes individuals who are required to self-isolate because they live with someone who has tested positive. So, the employer is now responsible for stopping the worker from working (unless they can work from home) if the employer knows they should be self-isolating. How will the employer know that? Well, the employee is now under an obligation to tell the employer that they are self-isolating.

It remains to be seen whether similar offences will be introduced in Scotland, but in any event, any employer who insists on an employee attending work when they are supposed to be self-isolating, must be in breach of their duties to that employee and to their colleagues.

Please contact a member of the Employment Team should you require any assistance in relation to the JSS or any other employment issue arising.

This update contains general information only and does not constitute legal or other professional advice.

Employment law:

Caroline Carr, Partner: E: cac@bto.co.uk / T: 0141 225 5263
Laura Salmond, Partner: E: lis@bto.co.uk / T: 0141 225 5313
Jacqueline McCluskey, Partner: E: jmcc@bto.co.uk / T: 0131 222 2936
Douglas Strang, Senior Associate: E: dst@bto.co.uk / T: 0141 225 5271

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