Government announces new Plan for Jobs in response to the Coronavirus crisis
Plans include a Job Retention Bonus for employers who keep on furloughed staff and opportunities for young people.
The Government has published its Plan for Jobs following Chancellor Rishi Sunak’s announcement in parliament last week. Further detail of these plans is expected before the end of the July.
Job Retention Bonus
There have been reports of redundancy plans across a number of sectors in recent weeks, particularly in retail and airline businesses. Concerns have been expressed that such plans have been triggered by the gradual withdrawal of support for employment costs for furloughed staff which begins on 1 August (see our recent articles on upcoming changes to the Coronavirus Job Retention Scheme (CJRS) here and here).
Perhaps as an acknowledgement of the risk to jobs linked to the withdrawal of the CJRS, the Government proposes to introduce a Job Retention Bonus. The policy states that this will entail a one-off payment of £1,000 to employers in relation to each furloughed employee who remains continuously employed through to the end of January 2021. It will only apply in relation to those employees who earn a monthly average of more than the Lower Earnings Limit of £520 per month between November 2020 and January 2021. Bonus payments will be made in February 2021.
It is likely that young people will be particularly hard hit by the impact of Coronavirus on employment opportunities. This will in part be because of closures and reduced trading in industries which employ a disproportionately high number of younger workers, including hospitality, tourism and high street retail. Young people are also likely to be hampered in seeking work by their lack of work experience.
As part of its Plan for Jobs, the Government intends to introduce a £2 billion Kickstart Scheme to provide 6-month work placements for people aged 16 to 24 who are on Universal Credit and who are at risk of long-term unemployment. The scheme will provide funding to cover 25 hours a week at the National Minimum Wage hourly rate, along with National Insurance contributions and employer minimum automatic enrolment contributions.
Additional funding for traineeships and apprenticeships
The Plan for Jobs also sets out the Government’s intention to provide additional funding for employers who engage with current schemes for traineeships, sector-based work academy placements and apprenticeships.
An additional £111 million will go towards funding traineeships in England. These are unpaid work placements for unemployed 16 to 24 years olds. They must include at least 100 hours of work experience and last for no more than 8 weeks. The trainee can receive help with English and maths during the placement. The Government will pay employers £1,000 per trainee taken on under this scheme. Traineeships are being extended to young people who have level 3 qualifications (such as A-levels, tech levels and level 3 NVQs).
The Plan for Jobs includes an additional £17 million in funding to increase the number of sector-based work academy placements. These are 6-week work experience placements which include pre-employment training and a guaranteed job interview.
Under the new proposals for apprenticehsips, employers will receive an additional payment of £2,000 (for apprentices under 25) or £1,500 (for apprentices aged 25 or over) for each apprentice they hire between 1 August 2020 and 31 January 2021. The £2,000 payment will be in addition to the usual payment to employers of £1,000 for each apprentice who is aged 16 to 18 or who is aged under 25 and has an Education Health and Care Plan.
Green Jobs Challenge Fund
The Government also plans to invest up to £40 million to create and protect 5,000 “green jobs” in England through environmental charities and public authorities. These green jobs will involve improving the natural environment, including planting trees, restoring habitats, clearing waterways, and creating green space for people and wildlife.
Full detail of how the Job Retention Bonus will work has not yet been published. Questions remain as to whether the bonus will be paid to employers in relation to each current member of staff who has been furloughed for any length of time and at any point between the beginning of March and the end of October. It is also uncertain whether there will be any further criteria to be met, for example in relation to the continued employment of these employees. If employers wait to receive the bonus and can then proceed to redundancy dismissals, the unemployment crisis may simply be further postponed by this intervention. On the other hand, the requirement to pay full employment costs for all employees from November onwards may compel some employers to carry out redundancies despite the promised bonus. There has also been criticism from employers who have struggled through the crisis without furloughing staff, perhaps using cash reserves, and who will not be in receipt of similar support.
It is to be hoped that these investments and innovations increase the life chances of young people and avoid mass unemployment in the upcoming months. Clearly employers will need to see the detail of these schemes before being able to assess whether they will be relevant or helpful for their organisations in the current crisis and beyond.
As those employers will know who already engage apprentices, there are significant responsibilities and obligations for employers who offer such places to young people and they should not be undertaken lightly. Voluntary and third sector employers may, however, be able to gain much from these opportunities to engage with a younger demographic.
If you would like to discuss any aspect of this article further, please contact Alacoque Marvin or any other member of the Employment team on 0113 244 6100.
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The information in this article is necessarily of a general nature. Specific advice should be sought for specific situations. If you have any queries or need any legal advice please feel free to contact Wrigleys Solicitors.