Introduction

Along with the announcement by the UK Government on Saturday, 31 October 2020 of increased lockdown restrictions in England with effect from 5 November 2020, came the news that the Coronavirus Job Retention Scheme (CJRS), which had been due to end on 31 October 2020, is being extended until December 2020. The Job Support Scheme (JSS), which was scheduled to come into effect on 1 November 2020, has now been postponed until the CJRS ends.

Key Points

Whilst additional guidance will be issued – hopefully soon – concerning the extension of the CJRS, the key points from the Government’s announcement are as follows:

• The employer need not have used the CJRS previously to utilise the extended furlough scheme so this extension of the CJRS is open to all qualifying employers.
• Grants under the extended CJRS as extended can be claimed in respect of employees who have not previously been furloughed. To be eligible to be claimed for, employees must be on an employer’s PAYE payroll by 23:59 on 30 October 2020 –  a Real Time Information (RTI) submission notifying payment for that employee to HMRC must have been made on or before 30 October 2020. This means that employees who have not been furloughed previously or were not eligible for coverage under the CJRS – for example, because of when they commenced employment – can be claimed for. It is not yet clear whether employers who have served redundancy notice on employees at the end of the CJRS because they did not wish or could not afford to take advantage of the JSS can now utilise the extended CJRS and what steps they need to take to do so.
• As was the case under the original CJRS, the Government will pay up to 80% of an employee’s normal pay, capped at £2,500. This is a more generous level of support than that would have been available under the JSS.
• The employer will only be required to meet the national insurance and pension costs arising in respect of payments made to employees who are furloughed during the extension of the CJRS – this contrasts with the last three months of the CJRS in respect of which employers have had to make increasing levels of contribution to the payments made to their staff.
• “Flexible furlough” will continue to be available - employers will be able to furlough employees full time or have them work part time.
• Employers will need to report and claim for a minimum period of 7 consecutive calendar days.
• The duration of this extension of the CJRS is not entirely clear – the Government’s announcement states that it will continue “until December”. As the new lockdown restrictions announced by the Government will last until 2 December 2020, the extension of the CJRS will presumably continue at least until that date.
• The Government has indicated that there will be a short period during which it need to change the legal terms of the CJRS and update its systems and that businesses will be paid in arrears for that period. The Government has indicated that there will be no gap in eligibility for support between the previously announced end date of CJRS and this extension.

Job Support Scheme

Following the initial announcement of the JSS on 24 September 2020, and the subsequent policy paper providing further detail of its operation and an expansion of its scope, more extensive guidance on the JSS was issued on Friday, 30 October 2020 on which we report here. Employers will therefore have more time to ensure that their implementation of the JSS is compliant and, for those who had decided not to take advantage of the JSS, to reconsider their position in the meantime.

Action

Employers who wish to take advantage of the extension of the CJRS will need to review the additional guidance which is due to be issued and will set out further details of its operation. More immediately, they will need to communicate with their staff and will potentially need to agree their participation in the extended CJRS. Depending on the employer’s current arrangements, this may involve agreeing an extension of current furlough arrangements, the replacement of an employee’s agreement to participation in the JSS by an agreement to revert to the CJRS or entirely new furlough arrangements.