Job Retention Scheme - should we just accept this

[RollaCola84]

My partner works in a sector that was required to shut down during lockdown and may have to again if new strict measures are put in place. He was on furlough from March to July but went back in full time once they were allowed to open, its an outdoor leisure industry so they make the bulk of their money over the summer.

We were expecting that he would be put on to the Job Retention scheme for winter. There's only a handful of full time salaried staff like my partner with the rest of the work done by casual staff (think gym instructors and you're in the right ball park) but yesterday his boss dropped the bombshell that they won't be using the scheme and instead they want to change his contracted hours permanently so he works full hours for 6 months and half hours for 6 months meaning a 25% pay cut.

I'm trying to be positive about what he can say to his boss to suggest alternatives but I'm worried this is an early sign that they want to get rid of the more expensive salaried staff and move to using casuals. He's not a young man and isn't qualified to do anything else. Don't know what I'm asking really but does anyone else have experience of employers deciding not to use the job retention scheme ?

This bastarding virus is ruining everything.

Well, unfortunately, the Job Retention Scheme' is an expensive way to run a business.

The staff member has to work (or at least be paid for) 1/3rd of their normal hours which the employer pays in full.

Then the Govt goes 50:50 with the employer to 'top up' the employees pay to 77%, so the Employee only gets 77% of their wages, with the employer pays 55% of the wages and the Govt Pays 22%.

The Employer is paying 55% of wages for 33% of the work

The intention is that the business shows commitment to staff retention. However, if they can't afford it, they can't afford.

Sectors that are currently 'closed' are going to be especially hard hit. NO income, but 55% of staff wages. It just doesn't work.

The £1000 staff retention that will be paid next year, is nowhere near enough incentive to keep staff on, that you can't afford. Juggling staff numbers & hours, is sadly, more cost effective.

It's only going to work where businesses can afford it AND want to keep highly skilled staff.

What has been suggested makes sense. It won't affect DH's pay by much (2%) & is far better value for the Employer, which may enable longevity of the business.

Nothing to stop DH looking for another job if he thinks there's a better option out there or going self employed if he thinks that's possible.

I need to do the maths again but I'd understood it was a split of thirds for unworked hours, so they'd pay him for the 50% of his hours they want him to work and then a third of the 50% he doesn't work with govt making up another third of the 50%. What they're proposing is a permanent 25% pay cut. It is a viable business albeit one that is generally quieter over winter, just feels like they're using this as a bit of an excuse.

Self employed isn't really an option in this sector, he's thinking of starting to ask around but its quite a small sector and full time salaried roles are not overly common. It's also the kind of sector where everyone knows each other and will hear if someone is job hunting. Its all just shit.

Rolla Yes, you've understood it correctly. He'd be paid for the 50% hours he's working, plus 2/3 of the remaining 50%, ie 83% in total

The employer would have to pay 50% plus 1/3 of 50, =66%

So the employer is paying for 16% of hours that they're not getting any work for.

So, yes, it is shit. But there's no requirement for the business to use the scheme. It may be that they genuinely can't afford to, or it may be that they're taking the opportunity to make changes they've wanted to do for a long time (they aren't the only company that are using Covid to push through new contracts).

There's a Treasury Fact Sheet on the scheme which is downloadable from this link

There's no requirement to use the scheme so I suppose it's about weighing up whether what the employer has offered is better than the likely alternative. Really shit situation though.

@MereDintofPandiculation - I think that's what they're doing. He's not sat twiddling his thumbs for 40 hours a week over winter but its definitely quieter, they've always been encouraged to take leave and TOIL from around now onwards when they're less busy.

16% feels like it should be a drop in the ocean to a decent functioning company, but a 25% drop is big for him. Its all just fucking depressing.

I've suggested he highlight the maths and suggest a temporary variation to his contract for this winter only.

The new scheme isn't really worth it for smaller employers with a limited income.

For an employee on NMW contracted for 30hrs per week but only doing 10 the scheme will cover £2.91 for each of the 20 hours not worked - so £58.20 while the employer will have to cover the £87.20 for the 10 worked hours, £58.20 for the 20 hours not worked plus the associated employees NI & pension contributions. The cost to the employer using the scheme will be approximately £160 per week - or they could just pay the £87.20 for the worked hours.

It's dressed up as a great scheme but in reality it's a bit shit & has probably been deliberately designed to dissuade employers from using it & keep employees below the threshold for eligibility for the job retention bonus!