Tag: Furlough

Older workers suffer a chronic underinvestment  

In a bid to stave off an unemployment crisis, the Government has announced a new £500m support scheme to help workers who came off furlough at the end of September.  

Chancellor Rishi Sunak is said to announce new measures that will include prioritising those coming off furlough for one-to-one support from jobcentres and extending the £3,000 incentive for employers to take on apprentices until the end of January 2022.  

Sunak is expected to continue with his pledge to do “whatever it takes” to support people through the crisis. According to news reports, Sunak will announce more plans for investment in the nation’s infrastructure and skills network, including tech. 

Following the announcement that Sunak will be “throwing the kitchen sink” at helping unemployed Britons, industry experts have weighed in on Sunak’s plans and there have been mixed comments. APSCo for example, doesn’t feel that this will solve the skills crisis.  

Tania Bowers, Legal Counsel and Head of Public Policy at APSCo commented: “While the additional funds are a welcome move, our concern is that these initiatives need to have the appropriate financial support, backing and processes that are required to make them wholly successful. The Kickstart Scheme, for example, received a wealth of interest initially, but the success has been limited, largely due to the over-lengthy processes that are in place. As a case in point, of the roles APSCo submitted on behalf of its members to the scheme, just 22% were filled, with a number of staffing companies still waiting on any referrals at all.  

“We are also concerned that many of the initiatives – including the investment in skills and the changes to visa requirements – remain focused on the creative industries. There needs to be a clear plan that supports core skills development across all professions in the UK.” 

Kirstie Donnelly MBE, CEO at City & Guilds Group weighed in, too: “Last week, the furlough system came to an end, leaving the jobs of a million people across the UK hanging in the balance. Half of those were workers aged 50 and over. Whilst unemployed young people saw interventions and safety nets put in place during the pandemic, unfortunately the same could not be said for older workers. Our recent Skills Index research highlights that older workers also suffer from a chronic underinvestment in training, meaning many will struggle to re-enter the workplace despite their wealth of knowledge, skills and experience.  

“Today, we have seen Rishi Sunak announce an extension to the Kickstart scheme as well as the introduction of an AI scholarship plan. Whilst these announcements are a positive step for the economy, they are once again tailored towards supporting young people. It is disappointing that the anticipated £500m support package for displaced workers, including support for older workers, was not mentioned in the Chancellor’s speech.  

“We still need to see more action from both Government and employers to recognise the value and potential of older workers. At a time where critical skills gaps plague the UK economy, it’s never been more important to support the full workforce, from those just starting out on their career through to those aged 50 and over.”

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The Recruitment & Employment Confederation has welcomed an Employment Tribunal decision that ruled that a temporary worker did not accrue holiday leave while on furlough, saying it provides much needed clarity for recruitment agencies.

Mr D Perkins v The Best Connection Group Limited (TBCGL) concerned a contract for services worker who had been placed on the Coronavirus Job Retention Scheme (CJRS).

The Tribunal was asked to consider whether or not the claimant should be entitled to accrue holiday pay while furloughed. It ruled he should not because he was not a worker for the purposes of the Working Time Regulations 1998.

It also highlighted that the terms of his contract with the agency were such that the agreement only existed when he was on assignment. It specified that he would not “receive payment from TBC or its clients for any time not spent on assignment whether in respect of holidays, illness or absence for any other reason”.

As he was unable to work for TBCGL while on furlough, the judge ruled the claimant could not be interpreted to be on assignment.

The ruling is aligned with government guidance on the accrual of holiday pay for furloughed agency workers, which states: “Some agency workers on a contract for services may not be entitled to the accrual of holiday or to take holiday under the Working Time Regulations while on furlough because they are not workers or treated as workers under those regulations when between assignments or otherwise not working on assignments.”

Lorraine Laryea, Director of Recruitment Standards and Compliance at the REC, said: “One of the major issues for recruiters in 2020 as they considered whether to engage with the new Coronavirus Job Retention Scheme (CJRS) to furlough temporary workers, was whether holiday and holiday pay would accrue for those workers who were placed on furlough.

“The REC lobbied the government extensively to release guidance on exactly this, which resulted in advice being published in May 2020. However, this isn’t statutory guidance and it’s important to bear in mind that the judgment is a first instance decision, meaning that other Employment Tribunals presented with similar cases could reach a different decision.

“However, the analysis in this case, which draws out the specific nature of temporary workers on contracts for services and the interaction with the holiday pay legislation and furlough provisions, is compelling and in the view of the REC more accurately reflects how the law should apply in these types of claims.”

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Older workers are more at risk of redundancy than younger workers as the furlough scheme begins to taper off, according to analysis by the Resolution Foundation.

The think-tank’s Living Standards Audit 2021 explored the impact of the pandemic on the millions of workers furloughed since March 2020 and was released last week alongside the most recent HMRC Coronavirus Job Retention Scheme (CJRS) statistics.

The latest figures revealed that only one in five of those who were furloughed in February were still furloughed in May, and there was a sharp fall in the number of people on furlough in May, with 2.4 million using the scheme at the end of the month, a 1.2 million drop from the 3.5 million furloughed at the end of April.

However, the Resolution Foundation warned that older workers made up a disproportionate number of those still on the CJRS.

Its analysis found that of those aged 55-64 who were furloughed in February, more than a quarter (26%) were still furloughed in May, compared with only 6% of those aged 35-44 and 16% of those aged 18-44. Overall, it found those aged 45 and over made up more than half of all workers on furlough in May, a significant jump from 38% in the first lockdown.

‘Parked’ on furlough
Karl Handscomb, Senior Economist at the Resolution Foundation, said: “Reopening the economy has led to a surge in people returning back to work from furlough, particularly young people in sectors like hospitality and leisure.

“But not everyone is back working. Over one in four older workers who were furloughed during the recent lockdown have remained parked on furlough during the reopening, and now face a higher risk of unemployment as the scheme starts to be unwound.

“It’s crucial that the Government does all it can to prevent rising unemployment among workers of all ages this Autumn when the furlough scheme ends.”

This view was echoed by Sarah Coles, personal finance analyst at Hargreaves Lansdown, who said:  “Older people are returning to work far slower than younger people. Furlough numbers for the under 25s dropped like a stone as hospitality businesses reopened, but the older you were, the less likely you were to return to work, and furlough numbers for those aged 65 and over fell just 16%.”

Men, travel professionals also at risk
She added that other groups also remained vulnerable to job losses. “Men are slower to come off furlough too, and men have overtaken women using the scheme for the first time since the very earliest days of furlough. This owes much to the fact that so many have returned to hospitality businesses, and far more women work in these roles than men.

“In some industries, furlough is still widespread, most notably airlines at 57%, hotels at 57% and tour operators and travel agents at 51%, and in these industries the numbers on furlough dropped far more slowly than elsewhere.”

While the furlough scheme will continue until September, the changes to employer contributions that came into effect last week are likely to prove a trigger for some employers to make redundancies.

Starting from the beginning of July, employers have had to contribute at least part of the 80% of wages paid to furloughed workers. Their contribution is currently 10% (with the government paying the remaining 70%) though this will increase to 20% in August and September, before the scheme winds down.

Coles warned: “For those still stuck on furlough, there’s the risk their employers will be seriously reconsidering whether they can afford to keep them on now they are shouldering 10% of their wages – alongside pension and NI contributions. These questions will become even more pressing when the scheme tapers again in August.”

Photo courtesy of Canva.com

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