After the Prime Minister instructed employees to work from home and non-essential businesses to close immediately, such as retailers, gyms, restaurants and pubs, employers have had to put in place contingency plans to support their staff and business.
As a result, many have rolled out pay cuts and started to furlough staff in order to keep businesses afloat during this uncertain time.
For example, HR Grapevine reported last month that US department store Macy’s had furloughed 125,000 staff members due to the coronavirus crisis, while the firm’s Board of Directors would also stop receiving their salaries.
However, former Spice Girl singer and fashion designer Victoria Beckham has since been slammed for her decision to furlough staff, using the Government’s Coronavirus Job Retention Scheme to continue paying employees their wages, despite her reportedly having millions to her name.
During ITV’s Good Morning Britain, presenter Piers Morgan criticised both Victoria and David Beckham after it was revealed that the VB fashion brand would be using taxpayer’s money to support employees, reported Metro.
Morgan said: “Sorry, this furlough scheme was not for primadonna multi-millionaires like you two. Running a famed vanity business that makes no money.”
Despite this, Morgan’s co-host Susana Reid defended the duo, claiming that the furlough scheme does not specify that it’s for essential or small businesses alone, adding that Victoria Beckham has pledged to pay the difference in all workers’ earnings as the furlough scheme only pays up to 80% of someone’s salary.
Yet, the VB brand isn’t the only employer to be criticised for the decision to put staff on furlough; earlier this month Liverpool FC reversed its decision to place some non-playing staff on temporary leave following fierce backlash.
Furlough extension
Despite this recent news, the Chancellor Rishi Sunak announced last week that the furlough scheme would be extended for another month, giving employers until the end of June to apply. This comes after business groups revealed that if the scheme was not extended then more jobs would be lost.
Sunak explained: “With the extension of the coronavirus lockdown measures yesterday, it is the right decision to extend the furlough scheme for a month to the end of June to provide clarity,” reported the BBC.
“It is vital for people's livelihoods that the UK economy gets up and running again when it is safe to do so, and I will continue to review the scheme, so it is supporting our recovery.”
The move has also been welcomed by Andrew Secker, Employment Partner and Legal Commentator at Mills & Reeve who said that the extension was ‘necessary’ due to the extended lockdown.
“The extension of the furlough period is a sensible but necessary consequence of the extended lockdown. It is also timely. Many employers were considering starting collective consultation about measures to address the long-term impact of COVID-19, such as redundancies or changes to pay or hours, in readiness for the planned end of the furlough scheme on May 31, 2020. This therefore releases the pressure building to act quickly,” he said.”
What options do employers have?
While many have opted to apply for the Government grant, there are several other options available to employers to help them keep their staff. For example, this may include putting in place varied scales of pay reduction, voluntary reduction schemes and furlough rotation of different groups of workers.
This, according to Alex Watson, Director and Employment Lawyer at Fieldfisher, has led to more employers promoting better fairness within the workplace.
He added: “One heartening theme that we have seen throughout this difficult time for both employers and workers is a general underlying intention to seek to be fair and minimise the financial impact on workers, particularly those on the lowest wages and with least security.
“For this reason, we have seen several businesses choose to implement smaller temporary pay reductions across the entire workforce in order to avoid more dramatic wage reductions through furlough or redundancies."
