The Job Support Scheme (JSS) is to come into effect on 1st November for a period of 6 months following the end of the furlough scheme on 31st October 2020 and it is the Government’s attempt to protect jobs and avoid redundancies.
The JSS will be open to all employers who have employees on their payroll on or before 23 September 2020 ie on a UK pay-as-you-earn (PAYE) scheme and employers must have a UK bank account.
However, it is noted that large employers can only take benefit of (JSS) if they satisfy the financial assessment test, this test will not apply to small /medium size businesses (SMEs).
At present, we are still awaiting Government guidance on the financial assessment test criteria but with (SMEs) there is a likelihood that the definition within Companies Act 2006 could apply of having to satisfy at least two of the below requirements:
annual turnover of £36 million or below;
balance sheet total of £18 million or below; or
250 or fewer employees.
We await Government guidance if the above is to apply.
The JSS is available to all employees whether been on furlough or not but it is a fundamental prerequisite of the scheme that employees must work for the first 3 months of the (JSS) for at least 33% of their usual hours (usual pay calculations will follow a similar methodology as the furlough scheme). This minimum hour’s threshold might increase in February 2021.
The consequences of the above, is that employers who do not have enough work for their employee to meet the 33% threshold cannot use the scheme and this has resulted in criticism of the scheme from industries.
In the context of 33%, it is unclear if it relates to over a week or an average over a month or longer period however government guidance suggests that employees will able to go on and off the scheme thus not needing to work a certain pattern over the month but suspect that each short-time working arrangement must cover a minimum period of seven days.
Redundancy Payment
Where employees are placed on (JSS), the is a requirement that employees cannot be made redundant or put on notice of redundancy during the period of the (JSS) hence employers must move employees off (JSS) and then look at redundancies although it appears redundancy consultation may continue whilst employee is on (JSS).
As for the calculation of statutory redundancy payments, it is likely to be calculated on the basis of the employee’s pre-pandemic pay, rather than the pay the employee received whilst on (JSS) as was the case with the furlough scheme but this has not been confirmed as yet by the Government.
With employees who may be covid -19 vulnerable and thus reluctant to take up (JSS), employers should already have had in place a covid-19 risk assessment to ensure premises are covid -19 secure and this should be readdressed and where there is no real or imminent risk of harm in the workplace of covid -19 or where all reasonable practicable steps are taken to reduce the risk to an acceptable level then the employee should return back to work ( if home working not practicable) and participate in (JSS) if required to do so and where an employee is still unwilling to return to work without just cause, employers could consider a period of unpaid leave as an alternative to the JSS ( check any lay-off clause in the employee’s contract of employment) or consider redundancy ensuring there is no discrimination based upon any underlying medical condition suffered by the employee.
To place an employee on (JSS),employers must mutually agree short time working arrangements or to check employment contract if there is a clause on lay-off /short-time working , amend /update the employment contract and notify the change in writing to the employee.
The (JSS) agreement should cover what are the reduced hours, extra top-up pay the employee will receive through the scheme and what happens in respect of the unworked hours that are not covered by the top-up and how will employees be moved off the (JSS), this agreement must be readily available to HMRC to check if requested.
Fact Sheet
The Government have provided a fact sheet on (JSS) and within that fact sheet there is a worked example related to employee, Beth, and our understanding of the worked example is as below: -
Beth normally works 5 days a week and earns £350 a week. Her company is suffering reduced sales due to coronavirus. Rather than making Beth redundant, the company puts Beth on the Job Support Scheme, working 2 days a week (40% of her usual hours).
Her employer pays Beth £140 for the 2 days she works. ( £70 per day)
The time Beth is not working (3 days) there is a loss of £210 in wages ( 3 days x £70) , how this unworked time is paid is essentially split into three:
1.the employer pays for a third of the unworked time - 210/3 = £70
2.the government also pays for a third of the unworked time (up to a cap) - 210/3 =£70 and
3.the final third is unpaid (although it is unclear whether the employer can offer extra top-ups).
So Beth gets paid £140 ( 2 days working) +£140 ( under Job support scheme) =£280 shortfall of £70.00 ( unless employer tops the shortfall).
The government contribution is capped at £697.92 per month thus it is likely that this cap would affect employees earning £38,000 plus. Also, the (JSS) grant will not cover Class 1 employer national insurance or pension contributions, thus it is our understanding subject to Government clarity that these contributions will remain payable by employers both to government top up, employer top-up and for pay for hours worked.
Employers will be able to make a claim under the JSS online from December 2020 and grant payments will be made monthly in arrears, reimbursing employers for the government's contribution.
Where an employer cannot afford to place employees on (JSS), then need to consider the options of mutually agreeing via meaningful consultation of temporary or permanent reduction in hours worked per week without the extra financial support or redundancies.
The situation is quite fluid and on 9th October the Chancellor has commented that (JSS) would also apply to Employees who work for UK firms forced to shut by law because of coronavirus restrictions and these employees will get two-thirds of their wages paid for by the Government, we are awaiting detailed Government guidance on (JSS) however it is hoped that above provides a general over view on matters and should you require further assistance, kindly contact our advice-line team.
