Experts campaigning for the introduction of a ‘part furlough’ element to the Government’s Job Retention Scheme have welcomed the Chancellor’s statement today but say the development is needed now, not in August.
Since early April, The HR Dept has been campaigning on this issue on behalf of the 6,500 SME businesses the company provides services to around the UK, to get the Government to amend its support scheme for businesses struggling through the coronavirus crisis.
The company has welcomed the unexpected extension until October of the JRS and the introduction of a ‘part furlough’ scheme in August.
However it says smaller businesses need a facility where employers can pay staff to work part-time with the Government contributing to the remaining wages.
Expert advisers at The HR Dept say smaller businesses desperately need an alternative to the current ‘all or nothing’ furlough arrangement.
Among them are Jill Bottomley, director at The HR Dept Trafford and Warrington, who has been leading the company’s work on this issue.
She has proposed an additional ‘short time working scheme’ and for non-working days to pay not the guarantee statutory pay of £30 per day (currently at a maximum of five days) but the same 80 per cent rate of daily pay, capped at circa £115 per day. She believes this would give businesses the flexibility to see some work carried out and parity in compensatory pay for those not working normal contractual hours.
A survey of more than 900 businesses conducted a fortnight ago by The HR Dept showed that 82 per cent of small firms would back the introduction of a ‘part furlough’ scheme. Ms Bottomley believes that introduction is needed now.
“The longer extension of the Job Retention Scheme until the end of October is unexpected and welcome and will provide relief to many business owners,” she said.
“And it is great news that the Government will be introducing a ‘part furlough’ intervention – something that The HR Dept has been campaigning for.
“However, the part furlough element needs to be introduced now to give employers the flexibility they need.
“This isn’t about forcing more employees to return to work where it is not right or safe to do so. It’s for the many businesses who desperately need that part time intervention, especially where work can be carried out at home.
“The reality is that it’s too simplistic for struggling smaller businesses to continue with an ‘all or nothing’ furlough arrangement. There is currently no facility for what would be a suitable solution, where employees can work for a day or so per week rather than their contractual five days.
“So a flexible solution is needed now, to let businesses continue with their work and so minimising the cost of the Job Retention Scheme.”
Ms Bottomley said her proposed solution would give businesses the flexibility to see some work carried out, with parity in compensatory pay for those not working normal contractual hours.
She said: “This would be a pragmatic, fair, equitable and much needed solution, that would be welcomed by SMEs and keep the wheels of commerce and industry going, subject to complying at all times with guidance from Public Health.
“Otherwise, there is a danger of creating a disincentive to work and of negatively reinforcing wrong behaviours which are not in the best interests of the employer or the economy. The less flexibility there is, the greater the risk of fraudulent claims being made to HMRC on behalf of employees who are actually continuing to work part-time behind the scenes.”
The HR Dept is a national business based in Bristol, with a network of licensees around the UK and Ireland providing outsourced HR advice and support to SME businesses.