Head of Employment Julian Cox comments on launch of Job Support Scheme
A new Jobs Support Scheme will launch on 1 November, which will require employers to give staff a minimum of 33% of their usual hours, with the government covering two-thirds of the wages for the remaining hours not worked.
BLM Head of Employment Julian Cox shares his views:
“The new ‘job support scheme’ is no doubt going to cause a huge sigh of relief for thousands of businesses that were otherwise facing a cliff edge - either make job cuts today, or struggle to pay wages indefinitely. Particularly in sectors such as hospitality, which is grappling with new restrictions and curfews, support for jobs is needed just as much as at the outset of the pandemic, if not more.
“The strategy is clear. Keep people in viable employment, and support businesses facing reduced demand for the coming six months. Employers in need of this support will now have to undertake a thorough understanding of where, if possible, to reduce hours, and whether they can balance necessary productivity with this reduction. Temporary contracts may also need to be agreed when hours are reduced, to ensure employees are clear on their new way of working.
“Whilst the Chancellor noted that as our understanding of this virus evolves, the government’s approach must also evolve, some will be asking whether the new scheme goes far enough to plug the gap. Many struggling companies will simply not be in a position to contribute that first 1/3 of wages, which we’ve seen already with the gradual wind down of the furlough scheme. As employers began to make greater contributions, unfortunately, some had to look at job cuts as the cash simply wasn’t available to cover wages.
“There will also be many asking whether this has come a little too late, with redundancies already having surged as employers make tough decisions to ensure survival in the long-term.
“Further, with the furlough scheme abused in some instances, it will be interesting to see how businesses will be monitored to ensure affected employees are only working the reduced hours, and not being encouraged to take on more.”