In the current crisis, it has never been more important for an employer to do the right thing by their people. Paradoxically, it has never been more difficult for many employers to do the right thing by their people, with many facing crippling economic circumstances that risk the very survival of their business.
In the last few weeks, employers have faced incredibly difficult decisions affecting their staff and the future of their business. And while we all know the more pressing issue with Covid-19 is saving lives, the impact on employers cannot be underestimated.
The sheer speed and the scale of this economic crisis has changed everything. While we thought 2008 was tough for business, this situation bears no comparison.
Humanity and good communication towards employees are vital amidst all this uncertainty. It’s the right thing to do. It’s also essential from a PR perspective. The news and social media have been quick to identify employers who have treated their staff badly. didtheyhelp.com has been set up categorising employers as heroes or zeroes.
Some businesses have been forced to make drastic decisions in short timeframes. Yet, even there, it is important that employers do not ignore the long-term impact of these decisions, or forget the human costs of redundancies, temporary closures or other cost cutting measures.
It is also essential that employers remember that maintaining goodwill will pay dividends when it (hopefully) has to call upon its staff to get the business up and running again. We have heard much talk of the importance of “culture” in organisations over the last 12 months; now is the time to live up to those commitments and “walk the walk”.
In contrast to previous downturns, employers must navigate the current crisis against an ever-changing landscape of legal and financial measures. The pace of this economic crisis has been matched by the pace of the legal developments. So, employers are having to rapidly familiarise themselves with the government’s COVID-19 support mechanisms.
A tricky area has been the new concept of furlough. Under the government’s Coronavirus Job Retention Scheme, employees can be furloughed, a temporary lay-off arrangement where they remain employed but undertake no work.
While furloughed, the government will pay 80 per cent of an employee’s wages, up to £2,500 per month. The scheme is obviously to be welcomed by employers and employees alike. However, as is perhaps inevitable when a scheme is created from scratch in record breaking time, the devil is in the detail (or the lack thereof). Many of the best employment law minds are struggling to understand elements of the scheme, so we need to show some sympathy for employers.
Some employers have decided not to furlough their staff and have faced pressure from employees, unions and some politicians.
On the face of it, their decision may seem heartless. However, few in my experience have made such a decision lightly.
The basic eligibility requirements for businesses to be able to rely on the scheme remain unclear. What evidence do they need? How “financially desperate” must they be? And for some employers their problems are not short-term or wholly Covid-19 related; in these cases, some are considering redundancies.
This is never an easy option; in the current climate, it is even less so. How do employers make redundancies in a lockdown world? That poses a new set of legal and practical challenges.
I have lost count of how many times I have read, heard and, indeed, used the word unprecedented recently. But it fits perfectly the situation in which employers are currently operating, even those who are trying to do the “right thing”.
Gillian MacLellan is a partner at law firm CMS
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