CHANCELLOR Rishi Sunak will extend the coronavirus job scheme for another month over fears thousands of workers would get redundancy notices from tomorrow.
The job retention scheme – which sees staff at firms furloughed but paid 80 per cent of their salaries – will be extended into June.
It was going to end on May 31 and without the security of the government backed cash many struggling companies would have to lay off staff.
Under current employment laws, companies have to issue 45 days notice before cutting roles – meaning letters could be sent to workers starting from tomorrow if the scheme ended.
But HOAR understands Rishi Sunak is set to expand the scheme for one more month, after First Secretary of State Dominic Raab announced an extension to the lockdown yesterday.
The extension will cost an extra £10bn – with the scheme already costing the taxpayer between £30bn and £40bn between March and the end of May.
It’s thought the scheme will be reviewed each month from now on.
Confederation of British Industry head Carolyn Fairbairn said the Government needs to take action to protect staff saying earlier: “This is quite urgent.”
Phil Pepper, head of employment at law firm Shakespeare Martineau, said: “Those organisations which currently can’t afford to pay wages and salaries after the May stop date will have to start
considering making job cuts now.”
A Downing Street spokesman said: “The Chancellor has said that the scheme is open for an initial three months but he will review extending it for longer if that is necessary.”
He added: “If the Job Retention Scheme is extended, any negotiations that are under way would be paused and the furlough period of those employees would continue.”
During the consultation period, bosses will first talk to unions or staff representatives, before launching individual consultations with the staff who are likely to lose their jobs.
Thousands of employees up and down the country have been sent home by their employers, with the Government backing up to 80% of salaries while they are unable to work because of coronavirus.
Companies who have already furloughed staff will expect to get their payments next week.
