The original JSS was announced on 24 September to help support viable jobs when there is a reduced demand in the winter months. The support initially offered under the JSS was subsequently increased when the JSS was updated on 22 October 2020 (Job Support Scheme Open – JSS Open). In the interim on 9 October 2020 the JSS was extended to support businesses in circumstances where premises are forced to close under a local lockdown (Job Support Scheme Closed – JSS Closed). For further details on the outline of the JSS Open please click here and for an outline of the JSS Closed please click here.
Key considerations for employers include:
Audit - Carry out a detailed audit of which jobs are viable and can be protected under the JSS Open. Identify what claims could be made under the JSS Closed where premises are forced to shut. Business planning will be key, particularly with work levels fluctuating and areas potentially going in and out of lockdown. Employers may need to switch between the two different versions of the JSS.
Communicate - Communicate with the workforce whether utilising the JSS Open or the JSS Closed. Consider whether collective consultation is necessary.
Written agreement – The government guidance on the JSS requires employers to ensure changes to the employment contract are made by agreement and that the employee is notified in writing. It is unlikely that any previous furlough agreements would suffice as the JSS is an entirely new scheme. The amount of salary an employee would receive under the JSS (open or closed) is lower than the minimum 80% employees received under furlough and this should be documented as part of any new agreement (subject to any top up provision). New factors need to be taken into account and should be documented, such as what happens if the employer cannot provide 20% of usual working hours or what if the lockdown is lifted? Employers should maximise flexibility in the contractual terms agreed with the employee.
The government guidance reminds employers that when they are making decisions, including deciding to whom they should offer reduced hours, equality and discrimination laws will apply in the usual way.
Changing terms and conditions - Reducing hours and pay under the JSS is a significant change to terms and conditions. Preferably the change should be administered by agreement. In the current climate employees may be more understanding and agreeable to such a change. However where this is not possible an alternative route could be to terminate the employment and re-engage the employee on the new terms. This option is not without risk and may require collective consultation depending on the numbers affected at any one establishment.
Keep a record - HMRC is actively pursuing fraudulent claims under the Coronavirus Job Retention Scheme (CJRS). It is important for employers to keep a paper trail of the government support which is utilised as HMRC will undoubtedly be carrying out audits. The guidance requires the written record to be kept for five years.
Utilisation of different government support - It is key for employers who are making redundancies to consider all of the government support available. Trade unions and employees alike will be looking for employers to utilise these schemes and avoid cuts where possible. The Job Retention Bonus can be claimed at the same time as claiming through the JSS albeit that employers need to factor in the timescales for payment of these schemes and potential cash-flow issues.
Redundancies – It is important to be mindful of the restrictions on the government support available when making redundancies. The JSS factsheets state "Employees cannot be made redundant or put on notice of redundancy during the period within which their employer is claiming the grant for that employee". Again business planning will be key to ensure employers which make the difficult but often necessary decision to reduce headcount, do not inadvertently jeopardise the government support available.
Further government guidance on the scheme is expected. We will keep you updated.
If you need any assistance with the issues raised please do not hesitate to contact a member of the UK employment team.