• The Chancellor has announced changes to the Job Retention Bonus, a scheme which offers financial support and rewards businesses that bring furloughed staff back to work.

    The scheme was first announced in early July. Within weeks, several large companies announced they would not be claiming the bonus in a bid to aid the country’s recovery. These included Primark, Rightmove, John Lewis, Barratt Homes, Redrow, Compass and William Hill.

    The Treasury has now provided updated guidance on how the scheme will work and who is eligible. It will be interesting to see whether more businesses are in a position to reject the bonus, perhaps feeling a moral obligation to do so, or if the anticipated £9 million cost to government will come true.

    How it works

    • Employers receive a one-off job retention bonus of £1,000 for every eligible employee brought back to work from furlough who remains employed on 31 January 2021.
    • Employers must have paid the employee a salary of at least £1,560 between 6 November 2020 and 5 February 2021 (the government has provided examples of this).
    • The employee is not obliged to pass the bonus onto the relevant employee.
    • If employers have repaid the entirety of the grant claimed under the CJRS for employees, they will not be able to claim the Job Retention Bonus.
    • Employers can only claim this bonus in respect of retained employees from 15 February 2021 to 31 March 2021.
    • The guidance has clarified that businesses are permitted to claim for the Job Retention Bonus as well as the recently announced Job Support Scheme.
    • If the employee is serving statutory or contractual notice on 31 January 2021, the bonus cannot be claimed.

    Impact on your business

    Many employers may need to consider redundancies as they move forward in light of the impact COVID-19 has had on their business. However, we would suggest it is important to evaluate the options offered by the government and whether on balance this may enable your business to avoid redundancies.

    When looking at whether using the Job Retention Bonus may be a viable means of retaining your employees, consider:

    • The cost of redundancy compared to the cost of continuing to employ an individual for three months with the aid of the Job Retention Bonus.
    • In these instances, it is likely that the Job Retention Bonus will only help employers retain employees who are on a lower wage.
    • If you are currently in a collective redundancy consultation, how the introduction of the Job Retention Bonus might affect this, ie delaying, mitigating or avoiding the process completely?
    • If the Job Retention Bonus is used in conjunction with the new Job Support Scheme does that amount to enough income to avoid or minimise redundancies?

    If you have any questions on the Job Retention Bonus or need advice on any other employment issues, please contact our Employment Team or book a free appointment to find out how we can help.


    On 5 November 2020 the Chancellor confirmed that with the announcement of the extension of the Coronavirus Job Retention Scheme until March 2021, the Job Retention Bonus would be scrapped and replaced with a new ‘retention incentive’ that would be deployed at an appropriate time.

    Further details have not yet been released but we will provide an update once information is available.

    This content is correct at time of publication

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