Winter Economic Plan: Latest government measures largely welcome, but a headache for those without an eye for detail

Today the Chancellor announced his Winter Economic Plan including a new Job Support Scheme (JSS) which is welcome news for many following the Prime Minister’s earlier statement on restrictions for the coming six months. The Treasury was under pressure to present a replacement for the furlough scheme which ends imminently.

However, these latest fiscal measures will undoubtably add another layer of complexity, presenting added challenges to employers and employees alike.

Carolyn Brown, Employment Legal partner at RSM said: ‘An eye for detail will be critical over the coming weeks and months. Employers will still need to agree with their staff the reduction in hours, and a reduction in pay of one third for those non-working hours albeit on a temporary basis. If this is not validly done, the organisation will store up issues for itself later as some current users of the CJRS have found. A fundamental difference is that the CJRS did permit redundancy notices whilst CJRS wages costs support was given but the new JSS will not. This means that employers of longer serving staff could now be facing supporting them and their wages costs through until next summer.’

Susan Ball Employment Solutions partner at RSM said: ‘This is welcome news for many. But at a time when organisations are grappling with the CJRS deadline to notify corrections following mistakes of 20 October under the existing scheme, to ensure that they do not suffer a 100 per cent tax charge or potential penalties, JSS adds another layer of complexity employers will have to get on top of. We must assume this will draw on the usual hours and reference pay calculations that are needed for flexi furlough claims. Sharp-eyed scrutiny will be paramount. But it does appear that employers will need to have the funds to pay employees’ wages payments before being able to claim.’

The new JSS takes inspiration from continental Europe, by subsidising “short time” work, helping top up pay for workers given fewer hours of work in the crisis.

This new version is designed to retain the jobs of those businesses that are still viable but operating at a reduced capacity allowing claims only for those actually working, albeit part time.

The new scheme will be available from November. Whilst the devil is in the detail, the new scheme looks like it will take parts from the latest version of the CJRS scheme in that employees will be required to work for a set amount of time which could be based on their usual hours and then for the remaining hours the cost will be shared.