Furlough for all? Is the Government Coronavirus Job Retention Scheme good for everyone?

Furlough for all

I think perhaps I am about to be a little controversial, or at least a bit challenging. Here’s why. I see the benefits of the government Covid-19 support in many areas, but I also feel there are some real problems here that are not fully being addressed—specifically, the issue of temporary and contract workers and the agencies that work to find them placements.

To be fair, the Government Coronavirus Job Retention scheme (CJRS) was a reaction to an unprecedented situation. This was the first time the government and the business community had been forced to react to a situation like a pandemic. A course of action was chosen and followed, and again to be fair, no choice was going to please everyone.

Temporary workers pose a problem

Many of the industries that were initially hit the most during the first round of lockdown relied heavily on temporary workers. Manufacturing and similar areas where close contact was required, simply stopped hiring. In other industries, traditional full-time employees were shuffled into what would normally be roles filled by temporary workers as the order books became quiet. Workers were all affected, the effect on temps was magnified, and essentially the work dried up.

For the temporary recruitment sector, it immediately raised a problem. Could a temporary worker be considered an employee for the purposes of the furlough scheme? After some initial confusion, this it seemed that in principle, they could. However, the employer responsible was likely to be the agent, meaning that the agencies were placed in an almost impossible position.

Firstly, a decision needed to be made about who qualified for furlough. This was simple enough in principle because the rule was anyone on payroll before 19th March 2020 (unfortunately, a few new starters fell through the cracks), but in practice, it was far from a simple process. The agency needed to make the decision. Furlough is based on the wages paid and the contracts in play. If, as is often the case, the temporary workers were on zero hours, how did the furlough scheme work?

Some of the potential questions and issues raised were:

  • If the agency refused to furlough an employee, would they be open to legal challenges?
  • If some were and some were not given access to CJRS, could it open up the potential for discrimination accusations?
  • The initial response of everyone would be to do what they could to help the workers, but what if that resulted in a huge financial strain on the agency? Claiming back the CJRS is one thing, holding out and covering the cost of the admin is another.
  • Variable hours and switching roles and pay rates, made calculating any furlough payments challenging.
  • There was no guarantee that the workers would return to them after the uncertainty ended.

Ironically, of course, some smaller agencies are run by owner directors who were exempt from support and couldn’t take CJRS themselves. As a result, they were often paying people more under furlough than they could for their own salaries.

There will be long-term effects

Over the course of the pandemic, agencies have made their decisions and done their best. However, there is still the longer-term effect to consider, and it could actually be the worst part of all this for the providers of temporary worker solutions. The furlough scheme may have done nothing more than kick the can down the road and delay the full consequences of the pandemic across the board. Retail and hospitality, in particular, have suffered badly and the full fall out is yet to be seen. As we start to see unemployment rise and redundancies hit, there could be a sudden surge in workers looking for fewer temporary positions. Add to this the number of people for whom the difficulties of being temporary during 2020 makes them doubt continuing, and the overseas workers who may be affected by Brexit, and this time next year we could be looking at a very different, and considerably more difficult market.

While we understand the need for haste and generally see the reasons behind CJRS, there is still a lingering concern here that it will not make the job any easier and may well prove to be a burden further down the track.

It’s not all doom and gloom

However, it isn’t all doom and gloom, because if there is one thing that we can be certain of in an uncertain time, it is the dedication of the recruitment companies and the people who work in them. We are a resilient bunch because it goes with the job. So, we will carry on and, despite the challenges, we will continue to do the best job we can. In our experience, and we work with a lot of recruitment agencies that are in this field, the agents that supply temporary workers are often misunderstood. The people who work in the temp recruitments sectors work long hours and often go the extra mile for their clients and candidates, and frankly, they deserve a lot more recognition than they get. One cannot help but wonder if the furlough scheme couldn’t have been adjusted to do more to support an industry that caters for millions of workers and contribute billions to the economy.

We are here to work with you, and as the backoffice requirements become more complex, we will make sure that we have the services you need to navigate the next year. Call us to see how our payroll solutions could help.

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