High uptake expected for extended scheme

The extension of the Coronavirus furlough scheme is a “dramatic change of approach” by the Government which will be welcomed by most business owners, a legal expert said today.

John Merry, head of employment at Lanyon Bowdler Solicitors in Telford, said he expected a high uptake of the scheme from businesses across Shropshire.

“This obviously represents a dramatic change in approach, with the Job Support Scheme, that was originally to replace the current furlough scheme with a more limited level of support for employers and their employees, and to run until the end of April 2021, now very much on the back burner.

“I was aware of little enthusiasm for the ‘JSS Open’ – the version of the Job Support Scheme that was to have been available to employers who were not legally required to close their premises due to national or local Covid-19 restrictions.

“It was to be available only for employees who were required to work reduced hours totalling not less than 20% of their normal working hours in any week. I had feedback from businesses who had been furloughing employees to the end of October, when the furlough scheme had been due to end, that the Job Support Scheme would be of no use to them.

“Certainly, we saw more and more employees made redundant as the end of October approached, who the envisaged availability of the Job Support Scheme did not save.”

John said that although a lot of employers would access the furlough scheme, many were now in a better position to keep operating throughout the tighter Covid-19 restrictions.

“We were seeing much reduced use of furlough by employers by October, with many employers having made a decision either to bring employees back to work or make them redundant by then. Obviously, the subsequent return to the forced closure of business premises under Covid-19 restrictions has brought with it a renewed need for the practice.

“However, this is to a lesser extent than during the virus’s first wave, as more businesses are able to continue operating, having adopted Covid-secure practices in workplaces and other measures, such as being able to better accommodate home working.

“We saw that many employers did not implement furlough arrangements correctly the first time around – including failing to consult or otherwise act correctly in modifying contracts, where required, or otherwise to properly record arrangements in writing. Those employers are encouraged to take better care if they are to utilise the extended scheme.

“We also saw a lot of employees whose employment ended shortly before the furlough scheme was first introduced in March being re-employed and placed on furlough.

“It is open to employers to do the same now with employees whose employment ended since September 23, and so I would expect to see something of a repeat of that – although not to the same extent as in the Spring, given that this time employers will have to pay the national insurance contributions and minimum auto-enrolment pension contributions of furloughed employees.

“Criticisms of the furlough scheme have included that it has been used by employers who aren’t actually struggling financially, and to fund notice pay for employees who are made redundant.

“The Job Support Scheme (JSS) was to address this to some extent. Employers with 250 or more employees were only to be eligible if they met a financial impact test, and it was to be the case that an employee could not be given notice of redundancy while subject to a claim under the JSS. There has been no indication that such restrictions will be applied to the extended furlough scheme.”

Pictured: John Merry