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UK Coronavirus Job Retention Scheme ("CJRS") - UK Government Support Reduces

Client Updates
On 1 August 2021 the UK government furlough support will further reduce in the wind-down prior to the CJRS ceasing at the end of September 2021. As previously noted in our update of 9 March 2021; UK Budget 2021-Coronavirus Job Retention Scheme and Self-Employed Income Scheme employees on furlough will continue to be entitled to 80% of their capped furlough wage for time spent on furlough. However, from 1 July, employers are required to pay 10% of the capped furlough wage and the UK Government  pays 70% of the capped furlough wage. The reimbursement element reduces again from 1 August to 60%, before the CJRS ends on September 30, 2021. At present, despite lobbying, the government is not minded to extend the CJRS generally or for specific sectors such as travel and entertainment where restrictions have limited the ability to re-open and/or open and operate at full capacity.

As at 31 May 2021, some 2.4 million people were still reliant on the furlough scheme, but the numbers on furlough has reduced from a peak of 5.1 million in January 2021 and, in certain sectors e.g. hospitality, employers report staff shortages and problems in recruiting staff.

With the reduction in employer support under the CJRS it is possible that in some sectors redundancies (severances) will occur. Employers who anticipate implementing redundancies will still have to give notice of termination and pay statutory redundancy pay to qualifying employees and may, depending on the number of employees at risk of redundancy, have to conduct a consultation process with employee representatives about whether there are any alternatives to redundancy before implementing any redundancy programme.

 

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