Extend furlough and allow part-time work, say industry bodies

Industry bodies are calling upon the government to ‘flex’ the furlough scheme as employers emerge from lockdown and make a staged return to operations.

They want the scheme to cover part-time or shorter-time working so that organisations can bring employees back to work gradually, either to comply with social distancing requirements or because demand for products and services is yet to return to normal.

Make UK, which represents manufacturers, urged the government to extend the Coronavirus Job Retention Scheme as “taking staff off furlough is likely to be a prolonged process”.

A survey of its members found that a third will wait for orders to increase before they take staff off furlough, while 25% say it will be a phased process. Almost a fifth of employers in the group have furloughed between 11% and 25% of staff.

Make UK chief executive Stephen Phipson said: “All the indications at the moment indicate that, even if a gradual easing of lockdowns begins soon, the impact of this shock will continue to hit companies and livelihoods for some time to come.”

The Independent Garage Association, which covers workers in car dealerships and repair garages, has also written to chancellor Rishi Sunak to request an amendment to the current scheme that would allow employees to ‘partially’ return to work as restrictions ease.

IGA chief executive Stuart James said: “Garages have been classified as an essential service throughout this crisis, however it has been very difficult for many of them to remain open in the current climate.

“It is common for garages to have staff dedicated to the role of MOT testing who do not repair cars. Due to the drop off in work volumes caused by the MOT extension and lockdown restrictions, garage owners have been left with no choice but to furlough these dedicated staff and, in many cases, close their business.”

James has asked the chancellor to consider a system similar to the French furlough scheme, which gives businesses the flexibility to bring in employees as and when they are needed, while claiming back a percentage of their salary for any hours not worked.

Earlier this week, the CIPD pressed the government to extend the furlough scheme until at least September and incorporate the ability for employees to work reduced hours if necessary.

Its survey of HR decision makers found that 78% of employers that had furloughed staff would find it useful if staff could still work reduced hours under the scheme.

Think tank Reform has also called for the introduction of short-time working under the scheme so employers can “wean” themselves off government support once lockdown is eased.

A Treasury spokesperson said: “Our unprecedented Coronavirus Job Retention Scheme is helping to keep millions of people in employment during this crisis, with UK employers able to apply for a grant that covers 80% of furloughed employees’ usual monthly wage costs.

“So far, more than 500,000 claims have been submitted through the scheme, helping to pay the wages of more than four million furloughed jobs.

“We will take into account the wider context of the lockdown, the public health response and the longer-term economic recovery when taking any decision on how and when to close or make changes to the scheme.”