Chancellor Rishi Sunak has today confirmed that the furlough scheme (formally the Coronavirus Job Retention Scheme) will come to an end, as previously announced, on 31 October 2020. Furlough will be replaced by a new "Job Support Scheme" (JSS), based on a policy of wage support closer to the existing scheme operated in Germany.
For self-employed workers, the Self-Employed Income Support Scheme (SEISS) has also been extended broadly in line with the new JSS, so that an initial taxable grant will be provided to those who are currently eligible for SEISS and are continuing to actively trade but face reduced demand due to coronavirus. An initial lump sum will cover three months’ worth of profits for the period from November to the end of January 2021. This is worth 20% of average monthly profits, up to a total of £1,875. It is anticipated that a second grant would then follow for the period February-April 2021.
The announcement of the JSS has been cautiously welcomed, but Shadow Chancellor Anneliese Dodds was critical of the fact that (unlike the scheme in Germany) the JSS does not cover or incentivise training for staff members in order to build skillsets and experience.
Before the Chancellor's announcement of the JSS, the TUC, CBI and Acas had released a joint statement, urging employers to "exhaust all possible alternatives" before deciding to make redundancies. Clearly, the introduction of the JSS is likely to be an additional factor to consider when businesses are making decisions about their workforce once the current furlough scheme comes to an end on 31 October 2020.
We know that times are tough, and that as a last resort, employers may make redundancies. But our message is that employers should exhaust all possible alternatives before making redundancies. These often emerge from effective consultation with workers and trade unions.