On 8 July 2020, Rishi Sunak announced the Government’s ‘Plan for Jobs’ which introduced several new measures that the Government plans to implement to help rebuild the UK’s economy following the Covid-19 pandemic.
The pandemic has greatly impacted the UK’s economy with over 9 million jobs (more than one quarter of the UK workforce) being furloughed through the Coronavirus Job Retention Scheme (“CJRS”). The new measures are designed to help support, protect and create jobs once the CJRS scheme ends in October 2020, whilst also preventing unemployment in the UK from soaring.
Policy 1: Job Retention Bonus Scheme
As the scheme starts to wind down, the Government are keen to encourage employers to bring employees currently on furlough back into the workplace.
To incentivise employers to try to retain furloughed staff, the Government have announced that they will make a one-off payment of £1,000 to employers for every furloughed employee they reinstate in the workplace, with the proviso that the employee remains continuously employed until the end of January 2021. The focus of this scheme is to support those employees who have been furloughed in being retained. To be eligible for the scheme, employees must earn above the Lower Earnings Limit (£520 per month) on average between the end of the CJRS in October 2020 and the end of January 2021. Payments from the Government will be made from February 2021 and further details about the scheme will be announced by the end of July.
What should you be thinking about…?
A key consideration as furlough draws to a close, is whether you have the means to bring back all your furloughed employees, as there may not be sufficient work for them to do. For many, £1,000 per employee will be nowhere near enough to compensate employers who need to pay each employee’s wage until the end of January 2021. Falling foul of contractual payments or underpaying returning employees may give rise to a breach of contract and/or unlawful deduction of wages claim, and minimum wage legislation.
Given the CJRS will come to an end in October, will you need to make redundancies to protect profits and maintain cash flow? If so, now may be the time to act, to ensure you leave yourself enough time to follow due process. Failure to follow the correct procedures when executing redundancies and failing to pay a statutory redundancy payment to any eligible employees may give rise to potential claims. You should also be mindful when selecting which employees will be at risk of redundancy and ensuring this is for a fair reason, otherwise you may expose yourself to the risk of claim(s) being brought.
Another key consideration is health and safety legislation and whether you can ensure that you can comply with your legal obligations to protect the health and safety of your staff if they are now returning to work. Have you conducted a risk assessment to ensure that social distancing measures are in place in your workplace? If an employee refuses to attend work on grounds of being scared for their health, then listen to their concerns and consider whether reasonable adjustments can be made to support them and facilitate their return.
Policy 2: Supporting Jobs
The Government are also introducing a number of measures to support people in finding jobs, measures to enable them to gain the skills they need to get jobs and provide targeted help for young people to get into work. These include:
The Government are setting up a ‘kickstart scheme’ to create hundreds of thousands of 6-month work placements aimed at those aged 16-24 who are on Universal Credit and are deemed to be at risk of long-term unemployment. The Government will directly pay any employer to create these training placements and the funding available for each job will cover 100% of the relevant National Insurance contributions and employer minimum automatic enrolment contributions. To be eligible for the funding, a minimum of 25 hours per week must be paid to the individual and they must be paid at least at the national minimum wage. Employers can apply to be part of the scheme from next month, with the first kick-starters set to begin their new jobs this autumn.
New funding for Traineeships, Apprenticeships and Further Education
The Government will be investing £111 million in traineeships this year. For each employer that hires an apprentice under the age of 25, they will receive a £2,000 incentive payment from the Government and those hiring an apprentice over that age will receive an incentive payment of £1,500. This incentive will run from 1 August 2020 – 31 January 2021.The Government will also be investing £101 million in Level 2 – Level 3 Further Education courses.
What should you be thinking about…?
If you are interested in benefitting from or engaging in any of the above schemes and taking on new employees, it is worth considering the needs of your business and workforce and whether you can support introducing new employees at this time. Additionally, have you tightened up your employment contracts? As of 6 April 2020, the law changed on what employers are legally required to provide their employees from the first day of working. Are you aware of the changes? Do you have a clear health and safety policy in place (which should tie in your Covid-19 risk assessment)? Do you have any remote working policies in place? Our employment team are highly experienced in drafting comprehensive and bespoke policies, procedures, and employment contracts to fit the needs of your business and employees.
Policy 3: Protecting Jobs
The Government recognises that a number of individuals across key sectors will be at risk of redundancy after the CJRS ends, in particular sectors such as retail, entertainment and hospitality.
To help combat this, the government has introduced the ‘Eat Out to Help Out’ scheme, which is aimed at encouraging people to return to eating out and to help keep hospitality businesses running. This will entitle every diner to a 50% discount of up to £10 per head on their meal at any participating restaurant, cafe, pub or other eligible food service restaurant. The discount can be used unlimited times and will be valid Monday to Wednesday on any eat-in meal for the entire month of August 2020 across the UK. Participating establishments will be fully reimbursed for the 50% discount.
Policy 4: Creating Jobs
The Government is also keen to create new jobs, and much of their policy in this area focuses on creating opportunities within the property and construction sectors.
It has been announced that Stamp Duty Land Tax (“SDLT”) will be cut until the end of the financial year, with the nil rate band of residential SDLT rising from £125,000 – £500,000 from 8 July 2020 through to 31 March 20201. The net effect of this will be that 9 out of 10 people on or moving up the property ladder will pay no SDLT at all. The Government have also announced a number of new ‘green’ and ‘construction’ based initiatives aimed at an environmentally friendly approach to economic recovery. For example, the Green Homes Grant of £2 billion will provide £2 for each £1 spent in making homes more energy efficient.
Our Employment Team can assist and advise both employees and employersin tackling the challenges these changes may bring. We can provide tailored, up to date advice to support your business in getting to grips with the new Government guidance and risks arising from the same.
Please contact us today by calling either our London or High Wycombe offices on the telephone numbers referred to at the top of this page, or by email: email@example.com
Please note this article reflects our understanding of the Guidance as at 13 July 2020. We highly recommend consulting the latest version of the Guidance before making key decisions, as this is a vastly developing area and it may well have changed. If in doubt, contact our team.