Covid-19: Chancellor announces new employment assistance package

As the Coronavirus Job Retention Scheme draws to a close and in light of new guidance issued by the Government in relation to Covid-19 on 22 September, the Chancellor has announced details of the new Job Support Scheme.

Rishi Sunak has confirmed the following points in the House of Commons.

• For a six month period starting from November, there will be a new Job Support Scheme, as part of the government's Winter Economy Plan.
• The aim is to support "viable" jobs, rather than jobs that have been artificially preserved by the Coronavirus Job Retention Scheme (CJRS).
• Provided an employee works for at least one-third of their normal working hours:
  • their employer will pay for hours worked as usual; and
  • for any unworked hours, one-third will be paid by the employer, and one-third by the Government and the employee will be expected to forgo the balance of their pay.
• That is summarised by the Government's flyer:

• Only small and medium sized businesses will be automatically eligible for the new scheme.
• Larger employers are in a different position:
  • they will only become eligible if their turnover falls;
  • the timing and degree of any fall has not yet been announced;
  • larger employers accessing the scheme will face restrictions on capital distributions to shareholders; and
  • they will also not be permitted to serve notice by reason of redundancy for any employee in respect of whom a claim under the scheme is being made.
• Businesses are eligible even if they have not previously used the CJRS.
• The Job Support Scheme will be in addition to the Job Retention Bonus.

This is more generous than the package originally proposed by the CBI, modelled on the German "kurzarbeit" system. Equivalent support will be made available to the self-employed, and these structures will sit alongside additional loans and loan guarantees available to business.

Further details have been published in the Government's factsheet.

If you would like to discuss your firm's position, please speak to your usual Macfarlanes contact.