21 Mar 2020
The Chancellor, Rishi Sunak, has outlined an unprecedented package of measures to protect millions of jobs and incomes as part of the national effort in response to Coronavirus.
The package was announced on Friday evening as the UK Government instructed entertainment and hospitality premises, like bars and restaurants, to close to limit spread of Coronavirus, placing even more business sectors under intense financial pressure.
A new Coronavirus Job Retention Scheme will be set up to help pay people’s wages.
Employers will be able to contact HMRC for a grant to cover most of the wages of their workforce who remain on payroll, but are temporarily not working during the Coronavirus outbreak.
Any employer in the country, small or large, charitable or non-profit, will be eligible for the scheme.
Here's what we know so far...
The aim of the scheme is to protect jobs and avoid redundancies arising as a result of the crisis.
Details so far include:
The Chancellor confirmed that the scheme would apply across the whole of the UK, including Scotland.
The measures have been widely welcomed - although the government is being pressured to consider further intervention to help self-employed people.
Employers will need to designate affected employees as furloughed workers, and notify their employees of this change.
They must note that changing the status of employees remains subject to existing employment law and, depending on the employment contract, may be subject to negotiation. This means that in the absence of any contractual rights to the contrary, employers would be wise to seek agreement from staff about furloughing before doing so.
They will then need to submit information to HMRC about the employees that have been furloughed and their earnings through a new online portal. HMRC will set out further details on the information required in the coming days.
It is expected that the payment of grants will be made within weeks and hopefully by the end of April.
Our Employment Law team is standing by to answer questions from business owners looking to use the scheme to save jobs.
We will have extra resources in place to offer support to businesses from Monday morning.