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Coronavirus Job Retention Scheme is coming to an end

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The Government’s Coronavirus Job Retention Scheme has been in place since March 2020. Although the amount of money contributed by the Government and employers has changed throughout, it has enabled millions of people to keep their jobs. To date, the scheme has costed the UK taxpayer £66 billion and has supported 11.6 million jobs.

As of May 2021, 2.4 million people were on the Coronavirus Job Retention Scheme, with estimates suggesting between 1.3-1.9 million people currently being on the scheme. Although businesses in certain sectors have asked for the support to be extended, the Government have refused.

July 2021 has seen the beginning of the end for the scheme, with employers being asked month by month to gradually contribute more money, with the scheme coming to an end by the end of September 2021.

Many businesses have struggled with cash flow due to COVID-19 and for some are looking at whether they can afford to retain all of their members of staff. For some, this could be a temporary issue, whereas others are worried about the long-term effects.

There are a variety of options for employers if they are faced with the difficultly of retaining all of their staff:

  1. Dismissals – employers could terminate individual’s employment who have less than two years’ service, in which they would be entitled to their contractual notice, which could be paid in lieu, together with a payment in respect of accrued untaken holiday entitlement.
  1. Redundancies – if employers need to make further savings, they could terminate employees with more than two years’ service by reason of redundancy. However businesses need to follow a fair and reasonable selection and consultation process, otherwise they could be exposed to claims for unfair dismissal. If someone is dismissed for redundancy, they would be entitled to claim the abovementioned payments and a statutory redundancy payment.
  1. Lay-off – employers are able to lay-off members of staff if the contractual right exists in their Contract of Employment. However individuals can only be laid off for a reasonable period of time. Individuals could get a statutory guarantee payment for time off work, although this is extremely low and payable for 5 workless days in any 3 month period. If the lay-off is for an unreasonable period of time, individuals could consider themselves to be redundant and claim the abovementioned payments.
  1. Unpaid leave and changing contractual terms –businesses could consult their workforce to see whether imposing unpaid leave, salary reductions or other contractual variations could be agreed, thereby limiting potential redundancies.

For further information, please do not hesitate to contact the Employment Team on 01905 734037 or by completing the online enquiry form.