On Friday afternoon, 20 March, the Chancellor, Rishi Sunak, announced a further series of measures to support people, jobs and businesses.
Perhaps the most surprising measure was the announcement that, for the first time in our history, the government is going to step in and help to pay people’s wages under a new Coronavirus Job Retention Scheme.
The Coronavirus Job Retention Scheme is designed to persuade employers who might otherwise make employees redundant to place them on temporary leave instead (referred to by the Chancellor as ‘furlough’), with the government agreeing to reimburse 80% of the salary of those employees, subject to a cap of £2,500 per month (which amounts to £30,000 per annum).
Please note that the government guidance makes it clear that moving employees to furloughed status will be subject to existing employment law and, depending on the employment contract, may be subject to negotiation. Also, the Coronavirus Job Retention Scheme does not appear to cover the wages of those employees who are working reduced hours, have accepted a temporary pay cut, or who are self-isolating in accordance with government guidance.
The new Coronavirus Job Retention Scheme will run for 3 months from 1 March 2020, but may be extended if necessary. The Chancellor has said that employers will be able to obtain a grant from HMRC to cover the wages of those furloughed employees, although as with much about the Coronavirus Job Retention Scheme, the precise detail of how and when employers will be able to access the grants has yet to be revealed.
If you would like further information about the Coronavirus Job Retention Scheme, or advice generally about managing your workforce during these unprecedented times, please do contact a member of our employment law team: Selene Holden ([email protected] ~ 01284 717436), Greg Jones ([email protected] ~ 01284 717446) or Angharad Ellis Owen ([email protected] ~ 01284 717453).