Furlough vital for mitigating redundancy and health & safety crises

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By Professor Tony Dobbins, Professor of Employment Relations and HR Management
President of the British Universities Industrial Relations Association

It was always possible that economic interests and profit would override public health concerns too quickly.

Furloughing measures restricting workplace presenteeism during COVID-19 are crucial for combatting both mass redundancies and contagion.

The Job Retention Scheme (JRS) is protecting workers nationally both from unemployment and potential fatality. On May 12th, the government said the JRS had protected 1 million businesses and 7.5 million jobs. It has been extended to October 31st. New flexibilities apply from August to “get employees back to work”, this means furloughed workers can then work part-time, and employers partly contribute towards wages.

However, at sector and workplace level, employer responses vary – notably between responsible compassionate employers protecting and consulting workers, and exploitative ones breaching health and safety and silencing worker concerns.

This crisis illustrates that trade unions are essential for collectively voicing workers’ concerns. It was unions that pushed the government to create (and extend) the JRS and now demand employer compliance with health and safety laws and workers’ rights to walk out of unsafe workplaces under the Employment Rights Act 1996, S.44. The UK HR body, CIPD, also state that employers should pass three tests before workplaces re-open: is it essential, is it safe, is it mutually agreed?

Unfortunately, policies like the furlough are compromised by ambiguous messaging from the government, such as the new “stay alert” slogan. This has sowed confusion amongst workers and employers. In contrast, devolved governments in Scotland, Wales and Northern Ireland have retained “stay home” lockdown, prioritising public health. After slow and incompetent reactions to COVID-19 (‘herd immunity’), premature lockdown easing in England poses risks for those compelled to return to workplaces without adequate protection, while fatalities persist.

It was always possible that economic interests and profit would override public health concerns too quickly. There are inequalities in exposure to risk affecting vulnerable groups; notably blue-collar occupations and the working class.

The JRS should be phased out gradually (and only when safe), with extended timeframes for labour intensive sectors most susceptible to redundancies.

In workplaces, employers should avoid panicked ‘knee-jerk’ reactions and brutal ‘shock doctrine’ responses that may damage workforce trust, morale and well-being.

My research on downsizing (Dobbins and Wilkinson, 2020) indicates many UK employers often historically respond to crises by short-term cost-cutting, shedding labour and enacting compulsory redundancies (including firing people on contingent casual contracts and externalising the employment relationship); encouraging by prevailing corporate governance. However, when the economy recovers, employers/HR have to recreate the recruitment, selection, retraining cycle afresh – a huge waste of time and resourcing.

The latest CIPD labour market outlook estimates that 21% of employers surveyed are considering permanent redundancies over the next three months, and 42% envisage pay freezes. But labour economists predict the labour market outlook will further deteriorate, with hiring declining and redundancies and unemployment increasing.

There are alternatives before the ‘nuclear option’ of redundancies, which should be a last, not a first resort. The CIPD and others propose alternatives to redundancy, including: short-time/reduced hours working; flexible working/homeworking; natural wastage; recruitment freezes; early retirement; redeployment/relocation; retraining; career breaks/sabbaticals; overtime bans; cutting non-pay expenditure; pay, bonus, share dividend freezes.

Fairness of treatment is crucial, and senior management should show ‘moral leadership’ by themselves making sacrifices. Collective consultation with employee representatives over job retention options, and health and safety concerns, is important. Inclusive employee voice signifies good employers and responsible business.

Looking ahead, the state could adapt the furlough by redistributing working time through a shorter working week – some British firms already have 4-day weeks. To prevent protracted economic slump, other new work policies include a Job Guarantee scheme for socially useful foundational economy and green jobs.

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