[UK] Overwhelming Support From Businesses For ‘Part Furlough’ Campaign

13 MAY 2020

According to the results of a recent survey, more than four-fifths of businesses support a motion to introduce a ‘part furlough’ element to the Government’s Job Retention Scheme, Shropshire Live reports.

Niamh Kelly of the HR Dept Shropshire Outsourced HR provider The HR Dept sought feedback from companies around the UK about the Government’s support package for businesses impacted by the novel coronavirus pandemic. Of the 915 respondents, 82 per cent said they would like the option to part furlough their employees so a skeleton staff could carry out essential business activities like payroll and invoicing and prepare the business for a return to usual activity. 

Although the Government’s support package has been positively received, businesses say the ‘all-or-nothing’ options under the furlough system stops essential tasks being undertaken due to reduced hours. Additionally, they highlight potential for resentment from employees asked to work fewer hours for reduced pay, against employees on furlough with 80 per cent of full pay. 

The survey asked respondents if they had employees who were ineligible for furlough because they were not on PAYE schemes ahead of the March 19 cut-off date. Over a third (36 per cent) had such employees. 

The HR Dept has a network of licensees supporting over 6,500 SMEs around the UK with outsourced HR. It reportedly intends to put the survey results in front of Government contacts and to share its findings with influential bodies like the Chartered Institute for Personnel and Development (CIPD). 

Níamh Kelly - who runs The HR Dept Shropshire - is heading up The HR Dept’s work on the subject in Shropshire. 

Ms Kelly said, “The survey puts concrete figures on what we suspected from discussions with our clients in the SME community. Namely that, while extremely welcome, the Government’s support package needs an appropriate intervention to reflect the genuine and widespread concerns of businesses at the smaller end of the spectrum. 

“Many of the company owners I have spoken to since the scheme was introduced – and this is backed up by the results of our survey – say that, because the system does not allow employees to do any work at all, most businesses are without the reduced but important contributions needed to keep core business activities going. Nor are they able to prepare for a resumption of activities when the furlough period is ended. 

“Those staff who may not get furloughed and are still working, often on reduced hours, with a limited number of statutory guarantee paydays making up the time when they are not required, then reverting to nil pay for non-working days. This is a major decrease in their earnings at a time when many colleagues are earning close to full wages despite not working at all. 

“This poses serious problems for continuity, morale among employees and potential burn-out for company owners who are having to take on extra responsibility rather than asking employees to work in unfair pay situations. 

“However, as often happens with constructive policy debate these concerns of smaller businesses are rarely aired. So we are doing all we can to represent their concerns.” 

The HR Dept proposes an additional ‘short time working scheme’ and on non-working days to pay the same 80 per cent rate of daily pay - capped at circa £115 per day - rather than the guarantee statutory pay of £30 per day (at a maximum of five days at present). Ms Kelly believes this would grant businesses enough flexibility to see some work carried out and offer parity in compensatory pay for employees not working their normal contractual hours. 

Ms Kelly 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.” 

Ben Willmott - the CIPD’s head of public policy - has supported the HR Dept’s position of flexibility. Mr Willmott was the keynote speaker at the company’s annual franchisee conference in 2019. 

On the CIPD website this week, Mr Willmott wrote in a blog, “The UK ‘all or nothing’ furlough approach may be simpler and easier to administrate than a more flexible scheme which enables short-time working but it also has significant drawbacks and disadvantages.?? 

“Firstly, it does not allow organisations to continue to use staff on reduced hours where this is possible, meaning it is much harder for employers to flex their workforce efficiently, placing more pressure on remaining non-furloughed staff who often have to work harder or in unfamiliar roles to compensate. “This is a particular challenge for micro and small firms under most financial pressure and with fewer staffing options.”