More flexibility is needed from the government’s new coronavirus job retention scheme, says engineering services trade body ECA
Some of the key details of the government’s new coronavirus job retention scheme have been questioned by ECA.
ECA’s director of employment and skills, Andrew Eldred, commented: “The Coronavirus Job Retention Scheme surely represents one of the most extraordinary products of these times.
“An effective 80% state subsidy for wages in the private sector, in a previously liberal free-market economy.
“However, ECA believes that a more flexible approach needs to be designed into the scheme from the start. First, employers should be given the option to share work more equitably between their employees.
“In addition, employers and their employees should be free to agree other reduced hours working arrangements, whilst still enjoying the security offered by the government’s 80% guarantee.”
ECA believes that sharing work more equitably between employees could be achieved by them moving between working and ‘furloughed’ status according to a structured pattern – for example, one week ‘on’, followed by one week ‘off’. Arrangements of this sort are quite common for ‘furloughs’ in the USA, and there are similar arrangements for short-time working arrangements in the UK.
Reduced working hours
Secondly, ECA believes employers and their employees should be free to agree other reduced hours working arrangements, whilst still enjoying the security offered by Government’s 80% guarantee. This extra flexibility should help encourage businesses to continue servicing customers – for example by carrying urgent or safety-critical work – without putting their own survival and the economic security of their employees at risk.
More widely, ECA expressed some concern about the possible impact the new coronavirus job retention scheme might have on those who continue to be employed and working, compared to colleagues who would not be required to work.
Coronavirus job retention scheme
The government’s coronavirus job retention scheme is open to all companies regardless of size. They can apply to HMRC for a maximum of £2,500 per ‘furloughed’ worker per month, worth 80% of their wages, with a grant paid direct to the business.
Other measures announced by the government to support businesses included an extension of the business interruption loan scheme to 12 months, and the ability to defer VAT bills until the end of the year.