Furlough in action: BDO, Renault, Paddy Power, Hogan Lovells and more

Employers are putting thousands of staff on furlough to reduce their costs and seek to protect their employment  during a challenging time, using the government’s Coronavirus Job Retention Scheme. Here, we round-up some of the announcements made by several major employers.

Guardian Media Group

The Guardian and Observer parent company Guardian Media Group expects to furlough 100 non-editorial staff in response to industry-wide falls in advertising revenue. The company will make a claim for 80% of their wages under the government scheme, but it will top up their wages to their full normal rate.

It had also introduced a number of other measures to cut staffing costs, including postponing pay rises for all UK staff and reducing the management team’s pay by 20% for six months.

Hogan Lovells

Law firm Hogan Lovells is furloughing staff across all of its European offices, including those in the UK, Belgium, France and Luxembourg.

Fewer than 30 UK employees, including receptionists, PAs and events staff, will be placed on furlough. It will top up their salaries to their usual rate, on top of the 80% provision from the government. Bonuses and profit distributions have also been postponed.

BDO

Around 700 employees including 470 first-year trainees and 230 support staff at accountancy firm BDO have been placed on furlough. It expects to top-up wages to 100% while staff are not working. Partners, however, have had their monthly pay reduced by 25%.

The company has also frozen all pay rises, promotions and recruitment, although offers already made to 400 trainees who expect to join the firm later this year remain in place.

BDO staff continuing to work can also request a temporary reduction in hours to help them balance childcare and other care responsibilities with their work.

Renault

Renault has put the “majority” of staff at its UK Formula 1 base on furlough until at least the end of May. Staff will receive 80% of their salaries, even if they earn above the £2,500 per month maximum covered by the government’s Coronavirus Job Retention Scheme. It said the vast majority of its staff in the UK had been on “total shutdown” since the beginning of April.

Paddy Power and Betfair

Despite sending its 2,300 shop staff home, the group formed of bookmakers Paddy Power and Betfair is choosing not to make use of the furlough scheme and pay staff their full wage.

Flutter Entertainment said in a regulatory statement today (17 April): “We have concluded that for as long as possible, we will endeavour to fund the salaries of all of our employees through the Group’s own financial resources. Should the duration of the crisis be such that not taking this support would jeopardise jobs, we will review our position.”

Barratt Developments

Around 5,500 staff at housebuilding giant Barratt Developments have been furloughed. The figure equates to around 85% of its workforce.

The staff will receive their full wages until at least the end of May, while the company’s board has agreed a  20% reduction in base salary and fees until site work resumed.

British Airways

British Airways has furloughed 80% of its workforce, around 36,000 staff. The employees – including cabin crew, ground staff, engineers and those in its head office – will be offered 80% of their wages through the Coronavirus Job Retention Scheme. No staff are expected to be made redundant.

Julie Goodway, an employment lawyer at Thomas Mansfield, said: “British Airways’ actions are unsurprising given the impact of the pandemic on their services. The staff are being asked to take furlough leave which will mean that they receive up to 80% of their salary, capped at £2,500 while they are not working. It may be better for the staff to take this as the other alternative could be redundancy. Nonetheless this is a difficult time for employees.”

Marks & Spencer

Furloughed staff at Marks & Spencer will receive full pay, the retailer has announced as it revealed a 15% pay increase for shop floor staff still working in its food stores. M&S temporarily suspended its clothing and home store operations and closed outlet stores last week, while its food and online businesses remain open.

Furlough on full pay is also being offered to food store employees who are vulnerable, pregnant or who have caring responsibilities, should they wish to volunteer for selection.

M&C Saatchi

International advertising agency M&C Saatchi announced to investors that it would be securing government support to furlough staff in the UK, US and Australia.  A large proportion of highly-paid staff who were being retained would see reductions to their salaries, while the board and senior management team have agreed to a 20% pay cut.

It said it would be supporting employees as much as possible, and noted that it had “ regretfully commenced consultation with a number of employees across the group about possible redundancy before the recent escalation in the Covid-19 crisis”.

Sir Robert McAlpine

Construction firm Sir Robert McAlpine is preparing to furlough around 50% of its 2,000 staff. According to an email seen by Construction Enquirer, the company said that unless it acted quickly it might run out of cash before the pandemic is over, putting the business at risk of collapse.

It said furlough was “the best opportunity” it had to protect jobs and the business. Those retained as “active workers” would need to take a 20% pay cut, while the executive board and senior leadership team will take a 40% reduction in pay, the email said.

“Our aim is to get as many of you as possible back working full-time as soon as we can,” it continued. “We will be reviewing all decisions relating to furlough and pay on a month by month basis and as soon as we can open our sites and return to fully operational status, we will.”

Disney

Workers on the set of Disney’s The Little Mermaid remake in the UK are being retained under the Coronavirus Job Retention Scheme. According to film industry news website TheWrap, staff have been informed that they will remain without work until the end of May unless production resumes before then or does not proceed as planned.

Pre-production of the film and several other Disney productions, was shut down on 13 March.

Evening Standard

The London Evening Standard has imposed a 20% pay cut on some staff and furloughed others, in response to declining advertising revenues because of the coronavirus. It is halting the publication of its weekly magazine, ES, which the editor, former chancellor of the exchequer George Osbourne, said was part of the “hard decisions” it had taken to “keep our people in jobs and go on bringing the paper to you during this crisis”.

It is not yet clear how many staff have been furloughed and how many have been asked to take a pay cut.

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This article was originally published on 2 April 2020 and updated on 17 April 2020.

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