Chancellor Rishi Sunak has extended the furlough scheme until the end of March next year.
The move comes as part of a Government jobs support package seemingly in flux – it was only last week furlough was extended for another four weeks after pressure from businesses and campaigners, postponing the Job Support Scheme until the new English lockdown ends in December. Now the JSS, a less generous system paying workers in “viable” jobs up to a third of their wages, has been put on hold.
Speaking to the House of Commons, Sunak also announced increased support for self-employed people and more money for the devolved governments in Scotland, Wales and Northern Ireland to help people through the Covid-19 crisis.
Here we lay out exactly what’s ahead for those on furlough from their job, how the new, now delayed support scheme will work, and what your rights are if your job is at risk.
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How is furlough changing?
The Job Retention Scheme will now last until the end of March, with the Government paying up to 80 per cent of workers’ wages (a maximum of £2,500 a month) through the furlough initiative designed to prevent mass redundancies.
The current requirements for employers – to pay for national insurance and pension contributions only – will remain until January, when the Treasury will review the country’s economic standing and decide if employers can be asked to pay more towards their staff’s wages.
Nearly ten million people have been furloughed by employers at some point during the pandemic, with roughly two million still being paid up to 80 per cent of their wages (a maximum of £2,500 a month) through the Job Retention Scheme designed to prevent mass redundancies.
“People and businesses have been pleading [for more support],” Shadow Chancellor Anneliese Dodds told the House of Commons, “and the Chancellor keeps ignoring them until the last possible moment”.
She said the delay on implementing the new measures has “cost livelihoods and lives” with many businesses having already made redundancies ahead of the less-generous Job Support Scheme being brought in.
It is unclear if the Job Support Scheme is still planned for the future. It would see workers receive up to two-thirds of their usual pay only if they could work a fifth of their normal hours.
I was already made redundant. Can I be furloughed?
Guidance from the Treasury says workers who were employed and on the payroll on September 23 and made redundant since can be re-hired and placed on the Job Retention Scheme. However there is no obligation for businesses to do this so talk to your former employer.
How is the other support available changing?
The Job Retention Bonus, which paid employers £1,000 for every previously furloughed employee kept on the payroll until at least the end of January, is being scrapped for now due to the furlough extension. Sunak told MPs it will be “redeployed at an appropriate time”.
Firms will also be paid up to £3,000 a month, the Local Restrictions Support Grant, if local measures mean they are forced to close.
The grant already available to self-employed people whose incomes have been hit by the pandemic has been increased to cover 80 per cent of their profits, capped at £7,500 over the November-January period.
Is furlough going to be available outside England?
It will continue to be available in all of the UK. Leaders of the devolved nations were already calling for a furlough extension from the UK Government, to allow them to implement stricter lockdowns independently with the best shot of slowing the spread of Covid-19.
How was the Job Support Scheme going to be different from furlough?
The JSS was set to cover employees who worked at least 20 per cent of their hours (down from a third). The government would fund 61.67 per cent of all remaining unworked hours while the employer funds 5 per cent.
This means staff would be earning less than they would working full-time, with the amount lost dependent on how many hours an employer could offer – or pay – an employee. Businesses would still be expected to pay national insurance and pension contributions.
Staff could work just one day a week and qualify for the scheme — but this means the workers at companies hardest-hit by restrictions would be worse-off.
Those who worked a day a week would get 73.3 per cent of their usual pay, regardless of how little that was, compared to 78 per cent for people who could work a third of their hours.
Workers will generally be better off on furlough, but campaigners are calling for a minimum wage floor to be implemented that will ensure already low-paid employees have enough money to live on.
Hidden homelessness – our new research reveals the reality of the people who are working and homeless – and why the insecure nature of some jobs is putting people at risk
#WorkAndHomelessness #InsecureHousing #WatesFamilyEnterpriseTrust pic.twitter.com/aSEAyKckDL
— St Mungo's (@StMungos) September 30, 2020
I’m still at risk of redundancy. What can I do?
Check if your potential redundancy is fair
Workers are protected from discrimination and from being selected for redundancy for an unfair reason like pregnancy, working part-time or having previously made a complaint about health and safety.
Using the usual selection criteria (e.g. measuring performance) may also be unfair if some of the workforce has been off work for the last few weeks or months for childcare, caring responsibilities, or shielding reasons, says charity Working Families.
Read up on how much redundancy pay you could be entitled to
Under law, there is a minimum statutory redundancy pay you should receive if you’ve been an employee for two years, and it depends on your age.
If you have worked for your company for less than two years or are self-employed, you’re not entitled to it. Bear in mind you could be denied statutory redundancy pay if you turn down a suitable alternative job from your employer without good reason.
If you are furloughed and likely to be made redundant soon, remember your redundancy pay should be based on your full wage, not what you were paid while on the furlough scheme (if you were paid 80 per cent of your wages while on furlough).
Check for what holiday pay you could be entitled to
Your employer can tell you to take any leftover holidays but must give you notice that’s at least twice as long as the leave they want you to take.
Check your notice period
If you’ve worked for your employer for between a month and two years, you’re entitled to a week’s notice. If you have been employed by them for more than two years, that goes up a week for each full year you have been there to a maximum of 12 weeks. Remember the notice period only starts when you’re formally told you will be made redundant and gives you a finishing date, not when told you’re at risk of redundancy.
You could be entitled to paid time off to look for work
If you’ve worked for your employer for two years at the end of your notice period, you’re likely to be have claim to “reasonable” time off to apply for jobs or go on training. You can take the time off at any time in normal working hours – up to 40 per cent of a week’s work – and your employer can’t ask you to rearrange your work hours to make up the time off.
Check if you get legal expenses cover through your home insurance
It could mean you get free legal help to challenge your redundancy if you think it’s unfair. And if you have a trade union at work, contact them for advice and potential representation. An employer must consult with a trade union or staff reps if more than 20 people are made redundant.
Remember being at risk of redundancy doesn’t necessarily mean you will lose your job
It could mean your employer redeploys you in another role. Consider contacting Citizens Advice if you need more support.
If you’re at risk of redundancy there are a few things you should do to check if your employer can make you redundant — no matter how long you’ve worked for your employer
⬇️ Our advice can help https://t.co/LTCmcq7Nn6
— CitizensAdvice (@CitizensAdvice) October 1, 2020
What do experts think of the new scheme?
Workers’ rights campaigners are united in their belief that the Job Support Scheme won’t be enough to save hundreds of thousands from losing their jobs.
Making the £20 uplift to Universal Credit permanent would “provide some much-needed security as we weather this storm,” said Citizens Advice chief executive Dame Gillian Guy.
“The furlough scheme has been an extraordinary intervention, but as it draws to a close we could face a bleak winter of redundancies,” she said.
“The Chancellor has acknowledged that the new Job Support Scheme won’t protect every job. While people look for work it’s critical our benefits system provides a strong enough safety net.”
Julia Waltham, joint head of policy and influencing at Working Families, told The Big Issue that it’s crucial employers apply the Job Support Scheme fairly to ensure that “working parents, particularly low-paid women, aren’t targeted for reduction in hours and, effectively, a pay cut”.
Julia Waltham, joint head of policy and influencing at Working Families, told The Big Issue the Government must do more to protect people. She said the increases in standard Universal Credit and Working Tax Credit payments made at the start of lockdown should become permanent, and said it should be extended to parents claiming legacy benefits.
She added: “Many parents—often those in insecure work and unable to work from home—have already lost their jobs. The Government needs to build on the positive flexibility UK workers have experienced since the onset of the pandemic and ensure that all UK employers are advertising vacancies on a flexible—including part-time—basis.”
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