Employment Update: Job Retention Scheme

Posted: May 13, 2020

On 12 May, the Chancellor announced that the Government will continue the Coronavirus Job Retention Scheme (often simply referred to as the furlough scheme) until the end of October 2020.

Until the end of July, the rules will not change significantly. Furloughed employees must still not do any work and they must be furloughed for at least three weeks at a time. However, from August, more flexibility is going to be introduced into the scheme. More detail is to follow, however, it is likely that employers will be able to furlough employees on a part time basis. For example, it is possible that an employee may be able to work three days a week and then be furloughed for two (with the Government offering a grant for some of the salary on the days that the employee is not working).  

Employees will be relieved to hear that they will continue to receive at least 80% of their salaries while furloughed (subject to the current cap). However, the Government has indicated that employers may be responsible for more of this cost in future. What this will mean in practice is not clear but guidance is likely to follow. It is clear that the Government is concerned about the increased costs of the scheme; so far, 7.5 million jobs from 1 million businesses have been furloughed

Andrew Lloyd, Associate, Simkins LLP