The Chancellor, Rishi Sunak, has announced a further extension to the Coronavirus Job Retention Scheme (CJRS), which will see employers able to furlough employees for an additional month.
The CJRS allows employers to retain employees on the PAYE Payroll who are not carrying out work for them by placing them on furlough and to claim a grant of 80 per cent of a furloughed employee’s usual pay, plus employer National Insurance Contributions (NICS) and minimum employer auto-enrolment pension contributions.
It means that employers can retain their workforce while reducing their staffing costs, although furloughed workers cannot carry out any work for the employer.
Business groups had sounded the alarm that employers could start the ball rolling on the redundancy process if the scheme was not extended beyond the end of May, because of the requirement for consultation periods if employers expect they will have to make collective redundancies.
Employers expecting to dismiss 20 or more employees within a 90-day period must hold a 30-day consultation, while those expecting to dismiss 100 or more employees must consult for 45 days.
This means that had the CJRS ended on 31 May, employers expecting more than 100 redundancies would have needed to have started consultations on 16 April 2020 if they planned to make employees redundant at the end of their furlough period. Meanwhile, Those expecting more than 20 redundancies would have needed to begin consulting on 1 May 2020.