Employers call for government to extend furlough scheme to avoid job cuts
Employers want the government to extend its worker furlough scheme to September and make it more flexible to help avoid a wave of redundancies.
A survey by the Chartered Insitute of Personnel and Decelopment (CIPD) found 60 per cent of employers thought extending the furlough scheme to September was the most important labour market policy change that would help them deal with the impact of covid-19.
The CIPD warned that without this change the scheme could be a “waiting room for unemployment and fail to protect significant numbers of the jobs it set out to save”.
Under the coronavirus job retention scheme, the government will pay 80 per cent of an employee’s wages up to £2,500 a month until the end of June if they are furloughed from their role.
They are not allowed to work for their parent company during this period.
Employers also want the scheme to be more flexible, enabling staff to work part time and have some of their wages covered by the government.
Seven in ten employers (70 per cent) that have already used or are considering using the furlough scheme, said that up to half of furloughed staff could potentially work reduced hours, while 16 per cent of these organisations reported that more than 50 per cent of furloughed staff could work reduced hours
The CIPD said changes to the scheme to allow short-time working would: “enable hundreds of thousands of furloughed staff to work in some capacity, helping to protect jobs, support businesses and reduce the burden on public finances.”
The survey shows that almost half (46 per cent) of employers have already furloughed staff, while another 10 per cent plan to do so.
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CIPD chief executive, Peter Cheese, said: “The government has worked hard to get the job retention scheme up and running so quickly. However, urgent decisions must now be taken to make it more flexible and to extend it so employers can continue to protect jobs.
“Letting furloughed staff work some hours, where possible, will enable organisations to bring back workers from furlough gradually while rebuilding their business. This will be vital as lockdown measures are eased over a number of weeks or months, and will reduce the risk of large-scale redundancies in this next phase of the crisis.
“The government must also consider extending the scheme to at least the end of September. This will provide more certainty for employers and ensure that there is no ‘cliff edge’ exit from furlough straight to redundancy for hundreds of thousands of workers at the end of June.”