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Companies that make redundancies after furlough should be made to pay the govt back?

(66 Posts)
Flimflamfloogety Fri 29-May-20 09:23:06

Just that really.

So many huge companies have taken advantage of the government furlough scheme which was created with the intention of keeping the company afloat (by reducing their costs) until things returned to normal, so that furloughed employees had a job to return to. Now we see a new name everyday in the press that is making redundancies on massive scales. Something doesn't sit right with me that they've let the government pay their staff for the last 3 months and now they're just getting rid of them anyway? I think they should have to pay the government back the salaries of everyone who's made redundant if they were furloughed.

I completely understand that companies need to make cutbacks, I just think it's despicable they've taken advantage of public funds and pushed us into recession just to sack everyone anyway.

As many staff are still on furlough, they are essentially getting the consultation period (1 month minimum) for free. At the very least they should have to pay their staff their full salary themselves during this period.

To name and shame just a few; British Airways, Easy Jet, Debenhams, McLaren, Uber and Addison Lee

OP’s posts: |
Meandyouandyouandme Fri 29-May-20 09:28:44

If these companies had sacked everyone at the beginning of this then the employees would have got nothing, this would be worse for the employees surely. At least they have had furlough pay and now redundancy money.

BeingonFBdoesntmakeittrue Fri 29-May-20 09:30:57

They didn't know at that point how long things would take or what the impact would be on their business (locally or globally) in the short/medium/longer term.

toodlepipsqueaks Fri 29-May-20 09:32:35

I take your point that some companies are taking the piss. But for others (particularly thinking of smaller companies with tighter margins) the scheme has given them some time to try to weather the storm and see where they are a few months in, or at least keep paying their staff when otherwise they would have been forced to make them redundant a month or two ago.

NailsNeedDoing Fri 29-May-20 09:36:42

The thing is that at the beginning when furlough was first introduced, companies took it because it was their only change of not making redundancies there and then. A lot has changed in the last few weeks and those companies will have had no idea how everything was going to unfold.

Furlough benefitted those employees as much as their employers, and I think they deserved to have it. While I can see where you’re coming from, I don’t agree. It’s not the fault of those companies that a virus came along and that they were ordered to stop functioning.

ivfgottostaypositive Fri 29-May-20 09:40:28

The government TOLD businesses they HAD to close so its only fair they provided financial support during that time

Businesses can now reopen and they will have a chance to make some money - unfortunately turnover is likely to be lower so some redundancies can be expected but that doesn't have anything to do with government and everything to do with our own spending habits - ie not going out for a drink or restaurant meal, ordering clothes on line rather than going into the shop

RicStar Fri 29-May-20 09:42:36

Honestly what would have been better about letting staff go in March when there were very limited jobs to go to. If firms had to pay this back then they will have to make more people redundant. Many firms have faced three or more months with no revenue, this will wipe out all profits for most uk firms, who are having to use reserves / take on debt to keep going while facing very uncertain future revenues. Your comment is extremely naive, businesses cant survive without income and now will have to adjust to the new normal, as will we all.

Woeismethischristmas Fri 29-May-20 09:43:29

It's not like they're keeping the money its going to employees anyone found to be abusing the system should have the book thrown at them though.

Di11y Fri 29-May-20 09:45:28

there are so few jobs opportunities and even fewer in March April. redundancy is supposed to tide you over til you get something else. if they hadn't done furlough it would have screwed the employees.

RicStar Fri 29-May-20 09:48:15

Many countries had more business friendly schemes - with sometimes lower % wage support but allowing people to keep working / reduced hours etc the UK scheme was explicitly employee supporting not business employere were just middlemen really, I think that was the right decision at the time.

AuntyRigsby Fri 29-May-20 09:51:17

YABU. It was a misconceived scheme. You can't change the rules retrospectively.

Waxonwaxoff0 Fri 29-May-20 09:55:51

As an employee on furlough, YABU. If I had been made redundant in March it would have been Universal Credit, no chance of getting another job in the current climate especially with having caring responsibilities while school is shut.

The business I work for is really hoping not to have to make redundancies, but if business doesn't improve over the next couple of months they might not have a choice. We are trading at 40% of our normal revenue.

Waxonwaxoff0 Fri 29-May-20 09:58:56

Also the companies you mentioned are big companies. Smaller businesses have less funds.

Iwalkinmyclothing Fri 29-May-20 10:01:22

DH is furloughed. We are expecting redundancy. YABU- better for him to have this time on furlough now and then be made redundant than have been made redundant weeks ago.

MMN123 Fri 29-May-20 10:02:37

If people didn't expect mass redundancies after furlough ended, they were very naive.

For all the complaining about how hard lockdown is, these are the good times. The hard times are yet to come for most.

Furlough was to avoid people having no job while locked down and unable to get another. And to preserve as many jobs as possible. If companies pay the government back, they will need to make even more staff redundant.

Did you really think companies that have had massive reductions in income would be able to magic up cash-flow immediately when furlough ends? Many will have reduced income for quite some time and people are likely to spend less than normal on non-essentials. So of course unemployment will increase.

But that isn't companies scamming the government.

Flimflamfloogety Fri 29-May-20 10:03:10

I'm talking specifically about big companies here. Ones that have clearly gamed the system. The ones I've mentioned were obviously struggling to begin with and are now using the virus as an excuse. Whilst they've lost revenue, the majority of their staffs wages have been covered by the government so their costs have reduced significantly.

At the very least they shouldn't be able to continue to furlough staff during their consultation period. They should be paying that out of their own pockets.

I'm also on furlough. My role is now at risk.

OP’s posts: |
MaudesMum Fri 29-May-20 10:03:53

There are types of organisations which actually can't re-open and won't be able to do so for a bit (Think of any organisation involved in "mass gatherings for a start) If they have to pay some of their furloughed staff's wages from August, they will almost certainly have to make them redundant...

NailsNeedDoing Fri 29-May-20 10:05:21

How big would the company have to be before you penalised them for their previous success?

Starcup Fri 29-May-20 10:06:34

I see where you’re coming from OP in general terms -

but Martin Lewis basically said people that were between jobs (left one waiting to start the other, but couldn’t due to lockdown) could ask their previous employer to help them by putting them back ok the books, so they can get furloughed- despite not having a job in that company any longer.

So I assume it’s to protect the staff members for as long as possible? I do see it from your point of view though as well. Why should the tax payer pay the wages those companies should be paying? But then it was the governments decision to close everything so they should foot the bill..... but of course there was a good reason the government did close everything...

I’m on the fencer lol

Teacher12345 Fri 29-May-20 10:06:56

If they had made people redundant in March they would have been unemployed for much longer, as no businesses have been open to offer jobs!

pennylane83 Fri 29-May-20 10:07:11

I dont think the government or companies really expected there to be such a drastic downturn in business (the governemnt certainly didn't expect everyone to close their doors in the way they did - only places like restaurants/retail/themeparks) or that it would go on for as long as it has. When people were put onto furlough it was in good faith that everything would be back up and running within 3 months yet here we are, with the furlough scheme now extended to end of October (so 7 months) because only now are people starting to realise that this thing isn't just going to disappear. What would you have preferred OP, everyone to have been made redundant in March with no chance of finding alternative employment given everyone is in the same boat or for companies to at least be given a chance to tread water whilst waiting for the tide to turn.

Dreamersandwishers Fri 29-May-20 10:07:14

I think you’ve missed the point of furlough , which was to support companies in supporting their employees. The fear was that had companies been left to their own devices they would have announced redundancies immediately, which would probably have led to huge civil unrest and a failure of lockdown. Companies were encouraged not to pull the trigger too early.
Believe me, I have listened to DH as he ruminates on how to bring the small company he is part of, back to full strength , and it’s not likely to happen in the current climate.

Moondust001 Fri 29-May-20 10:07:42

Whilst I have some sympathy, what about the small local businesses that are doing the same thing? You can't have one rule for big companies and another for small ones. The reality is that many of these companies, and actually, almost mostly the bigger ones, were teetering on the edge anyway, for many different reasons. And they were encouraged to furlough staff rather than make them redundant by the government. Like it or not, most businesses are ruthless when it comes to decision making - few would have kept on all those millions of people for no work. The government engineered the scheme to ensure that they didn't have to deal with mass unemployment at the same time as a lockdown.

Take one company you didn't mention, for example. British Aerospace. My friends husband is very senior there, and before Christmas he told me that there would be huge redundancies early this year. Nothing to do with Coronavirus, since it wasn't even an issue yet. In their case, entirely to do with Brexit. The UK government told the industry that they were pulling out of a European aerospace safety standard process, and intended to develop a UK one. To do that and get international recognition was estimated to be likely to take ten years. British Aerospace currently have two European test centres, one in the UK and one in Germany. They wouldn't be able to use their UK one until the new standard was approved, it would take alot of money to develop the new systems - and they have a nice shiny centre already in existence in Germany, internationally approved already. What were they going to do - yes, they were already planning to close the UK one and move everything to Germany.

Has Coronavirus changed anything? You'd thing that it might have made things worse but it hasn't. Nor has it changed anything. Despite the current drop in air travel, their order books are FULL, and they have just taken everyone off furlough. But that doesn't change the fact that it makes no sense to build here and then test in Germany - so those will be a lot of the jobs currently being lost. Of course, the government will have a handy scapegoat in coronavirus to blame, but actually that has nothing to do with it. If anything, it's given a lot of employees some breathing space from what would have been inevitable anyway.

heartsonacake Fri 29-May-20 10:09:17

YABVU. These companies furloughed their staff to try and keep the businesses going. They had no idea that after several months they may have to make redundancies and worst case scenario shut down altogether.

BlackberryCane Fri 29-May-20 10:10:10

You can't retrospectively change the conditions of the grant.

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