Job retention scheme a “game changer”, says legal expert

This article is more than 5 months old. Please read this page keeping its age in mind.

Employment law experts have welcomed the latest government measures to pay up to 80 per cent of employees’ wages – describing them as a “game changer”.

John Merry, head of employment at Lanyon Bowdler
John Merry, head of employment at Lanyon Bowdler

The Chancellor has announced a package of temporary measures to support people and businesses in the wake of disruption caused by the Covid-19 outbreak.

This included reference to a Coronavirus Job Retention Scheme which, in basic terms, will cover 80 per cent of payments to employees up to a total of £2,500 per month, back-dated to 1 March – initially for three months, but to be extended “if necessary”.

John Merry, head of employment at Shropshire law firm Lanyon Bowdler, said “As the name suggests, the scheme is aimed at minimising job losses. Whilst full details are awaited, what is clear is that this will be a game changer for many businesses and their employees.

“It might not only prevent future dismissals, but some employers might look to withdraw notices of dismissal that have already been given, or re-engage employees who have already been dismissed.”

The government has stated that all UK employers will be able to access support to continue paying part of the salary for employees who are “furloughed”, and has also described the support as applying to employees who are “otherwise laid off”.

John explained: “The word ‘furlough’ means to allow or force someone to be absent temporarily from work. Colloquially, ‘laid off’ can be taken to mean ‘dismissed’, but in the usual legal sense it means being temporarily required to not work.

“Despite the inconsistency in the terms used by the government, and how they have been used, it’s clear that the scheme is intended to apply to individuals who remain employed but are temporarily not required to work.”

Initial guidance states that to access the scheme, employers will need to designate affected employees as ‘furloughed workers’, notify them of this change, and submit information to HMRC through an online portal, which is intended to be operating by the end of April.

John added: “Within guidance published online, there is a hint that businesses will be able to reclaim 80 per cent of all costs in relation to employees, and not just wages, up to the monthly cap of £2,500, such as in relation to national insurance and pension contributions, medical or life insurance and company cars – but whether this is to be so remains to be seen.

“Also, as yet, there’s no indication as to how the level of pay is to be determined under the scheme for employees with irregular earnings, such as those who work different hours each week.”

The government has said that employers can top up laid off employees’ pay to full pay, but they do not have to. However, the more pertinent point is whether it is open to employers to not pay employees in full.

John said: “The scheme will not provide employers with the automatic right to lay employees off on reduced pay. To do this, there must either be a contractual provision entitling the employer to do so, or else employee consent will be required.

“The reality is that, surely, where employers don’t have a contractual right to lay employees off, most employees will gratefully accept being laid off on 80 per cent of full pay rather than face possible dismissal. But some might not.

“In that event, employers can look to dismiss by reason of redundancy – although a fair procedure must be followed in the case of employees with two or more years’ service, and collective consultation rules can apply where 20 or more employees are affected.”

John said as positive a move as the new scheme was for protecting employees, it might cause some resentment.

He added: “If some employees have to continue working to earn their pay whilst others are getting most of their pay for doing nothing, this might impact on employment relations.

“To address this, some employers who are to furlough only a proportion of their workforce might look to rotate the affected employees to share the ‘benefit’ of being laid off.

“There is no suggestion so far that the scheme will assist businesses or employees in the context of short-time working, that is to say, when an employee’s working hours are temporarily reduced.

“For example, some employees will have had, or will have, their working week reduced, maybe from five days to four, or even down to one. It seems that as such employees are not completely laid off, the government will not provide funds for employers to top their pay up to any extent.

“Again, this might cause employees to feel resentment – particularly if they have colleagues who are laid off altogether on 80 per cent of full pay.

“Employers might therefore want to revise arrangements for short-time working in light of the availability of the Job Retention Scheme. “It remains to be seen, but it might be possible to alternate employees between periods of lay-off and periods of work, and/or to rotate employees who are laid off, to maximise the funding accessible from the scheme and also spread around the workforce the impact of  20 per cent reductions in pay.”

Shropshire Business News sponsored by...
Shropshire Live Business
The latest Shropshire business news from the Shropshire Live team. Send us your business news to business@shropshirelive.com. Interested in advertising with us from just £50 per week? Call Fiona on 01743 816 817 or email sales@shropshirelive.com.
Advertise with us for £50 per week

Advertisement Feature

Cartwrights provide a convenient waste disposal solution

Do you need a skip or trade waste disposal solution? With a modern fleet of over 20 vehicles and a dedicated customer-focused team, Cartwrights can provide the service you need.
- Advertising -
Advertise with Shropshire Live for £50 per week
Flash flooding hit many roads across Telford. Photo: Telford & Wrekin Council

Flash flooding hits Shropshire on second night of thunderstorms

Heavy rain caused flash flooding across parts of Shropshire last night as the county was hit by another storm.
The scene of the collision on Shrewsbury Road in Hadnall. Photo: @OPUShropshire via twitter

Car collides with electricity pole and building in Hadnall

The A49 north of Shrewsbury was closed on Wednesday evening after a car collided with an electricity pole and building.

Casualty cut free from vehicle following collision near West Felton

A casualty was cut free from a vehicle following a collision at Weirbrook near West Felton on Wednesday afternoon.
Simon Kerrigan

Simon Kerrigan signs for Northamptonshire

Simon Kerrigan has sealed a return to the first-class game by signing for Northamptonshire.
Jason Silverthorn has returned to Telford Tigers for the 20/21 season. Photo: Lauren Rankin

Telford Tigers’ Captain returns for 20/21 season

Telford Tigers are delighted to announce the return of club captain Jason Silverthorn for the 2020/21 season.
The scene at Oswestry as Shropshire faced Herefordshire in Sunday’s friendly

Shropshire’s young cricketers highlight the positives following friendly defeat

Director of Cricket John Abrahams says Shropshire’s young side were quick to highlight the positives and also the areas that need addressing following Sunday’s friendly defeat against Herefordshire.
- Advertising -
Dena Evans from Reech with Terry Gee and Kay Bennett from Stay Telford

Reech Media rebrand local charity, Stay Telford

Reech Media have recently launched a new logo for Shropshire based organisation, Stay Telford, to commemorate the charity’s 30th birthday in 2020.

Shropshire’s Visitor Economy sees strong recovery since reopening

Bookings at some of Shropshire’s most popular holiday spots have seen a huge spike in the past month, says Visit Shropshire, with a high number of tourists choosing to stay at home, rather than travelling abroad.

Yarrington supports ‘world first’ Kayak 4 Heroes expedition

Shrewsbury-based Yarrington Ltd is helping to improve the ability of Kayak 4 Heroes expedition to engage with members of the public and potential sponsors.
The transformed Squatters Cottage in Lightmoor Village

Rare 18th century cottage in Telford brought back to life

A rare and dilapidated 18th century cottage in Telford has been brought back to life following a restoration project.
Polka Dot Travel in Market Drayton

Travel agent targets youngest adventurers for reviews

Polka Dot Travel in Market Drayton has temporarily swapped Trustpilot for toddlers as it hands its reviews over to its youngest travellers.
Shirehall Shrewsbury - Image Shropshire Council

Shropshire and Telford & Wrekin Councils: your guide

From types of councils to council cabinets. This is your guide to Shropshire and Telford & Wrekin Councils.
- Advertising -
The Granary Gallery at Weston Park

Shropshire Virtual Show offers exhibition prize to local artists

Professional and amateur artists are due to compete in an inaugural online show celebrating the best of the county, with the chance to have their work displayed at an exhibition at Weston Park this autumn.
Two of the ‘Shropshire’s Got Talent’ competitions judges - Ian Bartholomew and Loveday Ingram

Coronation Street star and stage heavyweights to judge Shropshire virtual talent show

Coronation Street’s Geoff Metcalfe, actor Ian Bartholomew, joins stars of stage and screen who have generously offered their time to take part in ‘Shropshire’s Got Talent’, an exciting online competition open to all.
‘Tales from the Trees’ is a terrific tangle of puppetry, storytelling, live music and comedy, with a theme that embraces natural history, folklore and ecology

Experience live outdoor family theatre in Telford this August

Telford & Wrekin Council is offering the opportunity to experience live family theatre performances in unique outdoor settings during August.

Salopian Brewery take Overall Gold in first ever Digital Beer Awards

An English Bitter from a brewery in Shrewsbury has beaten almost 500 different beers from across the UK to be named overall Gold at the inaugural SIBA Digital Beer Awards.
Pictured behind the bar are Alex Marsh, Landlord at the Swan with Heather and Rich Marsh

Joule’s Brewery opens its newest Taphouse in Forton

Regional Brewer Joule's Brewery has opened its newest Brewery Taphouse, The Swan Hotel, Forton.
Wardington’s Original Ludlow Gin

Ludlow Gin wins four medals at London Spirit Competition

Wardington's Ludlow Gin is celebrating after winning four medals in the London Spirit Competition earlier this month.
- Advertisment -

Advertisement Feature

Weather

Shropshire
mist
18.9 ° C
19.4 °
18 °
100 %
2.1kmh
88 %
Thu
25 °
Fri
24 °
Sat
23 °
Sun
20 °
Mon
21 °
- Advertisment -
- Advertisment -

Latest Articles

- Advertisment -