Furlough scheme entitlement date extended to March

The Treasury has announced that the UK’s Coronavirus Job Retention Scheme is to be extended from the end of May to the end of June, allowing staff to be on furlough for another month.

It has been suggested the scheme will cost £10 billion-a-month, but Rishi Sunak, Chancellor of the Exchequer believes this is “the right decision” to make.

Mr Sunak said:

We’ve taken unprecedented action to support jobs and businesses through this period of uncertainty, including the UK-wide Job Retention Scheme. With the extension of the coronavirus lockdown measures yesterday, it is the right decision to extend the furlough scheme for a month to the end of June to provide clarity.

It is vital for people’s livelihoods that the UK economy gets up and running again when it is safe to do so, and I will continue to review the scheme so it is supporting our recovery.

This comes after Dominic Raab, Foreign Secretary extended the UK lockdown by at least another three weeks. On the 15/04/20 the Government extended the start date of the furlough scheme to the 19 March from the 28 February, so more employees could be placed on the Coronavirus Job Retention Scheme.

The furlough scheme means the Government will pay 80 per cent of the wages of staff who have been furloughed. 

Frances O’Grady, general secretary of the Trades Union Congress (TUC) said:

This is very welcome news for workers and their families.

If the scheme had not been extended, the deadline for redundancy consultation notices would have been tomorrow (18/04/20). So it was vital that this announcement came quickly after the lockdown extension.

Employers must continue to make full use of the scheme to furlough workers and protect jobs. There is no reason to make any staff redundant.

 

Phil Pepper, head of employment at Shakespeare Martineau, said:

Extending the scheme is exactly what UK businesses have been hoping – and lobbying – for. By allowing companies to continue furloughing their employees until the end of June, the Government has saved many businesses from having to consider starting redundancy processes, which are often painful and tricky to manage.

Curbing job cuts has been at the heart of the Government’s COVID-19 plans so far and it seems that this approach is set to continue. Ending the scheme on 31 May would have effectively put businesses in a tricky position: either bring employees back to work even if suppliers and customers are still shut down and shoulder the salary costs, or make furloughed employees redundant. This extension is the best and most logical approach and will be a welcome lifeline for many UK companies.