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

[Flimflamfloogety]

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

Someone I know had made the decision to make 50% of their workforce redundant and across the board 20% pay cuts for the rest just before the furlough scheme was announced. Luckily those people have been salaried since March. But they will still be made redundant later because the business has no cash to pay them and likely existing staff will need to accept pay cuts too.

@pennylane83
(the governemnt certainly didn't expect everyone to close their doors in the way they did - only places like restaurants/retail/themeparks)

What makes you think this?

What a brilliant idea OP

I'll give you the example of my company. We are making about 500 people redundant. If we had to pay back furlough we would go bankrupt. That would mean about 1400 staff loosing their jobs.

Is that your plan? YABVVVVU

If they had made their employees redundant from the start, it would have been much worse for those employees. I would much rather companies protected their staff as much as possible by utilising the furlough scheme for as long as they were able to.

These companies would much rather not have to make people redundant - it’s hardly a sign of a thriving business - but the reality is many, many businesses will not survive this situation. If they can protect their employees for as long as possible in the meantime, good for them.

And remember - if people had been made redundant several weeks ago, it would still have fallen to the government to support them. So it would hardly represent a massive saving to the public purse.

I think some companies have abused the scheme yes...

Maybe:

1. It has given companies time to see which workers/sections need to cut back and which don't.
2. Some companies just will not have the work initially - car sales - 99% down.... so have to lay off - but whilst the government are paying they will hang on. These people may be currently enjoying furlough or not but many in some jobs might suddenly find themselves on UC - so having a good time whilst they are still paid. I don't blame them but personally I would not be spending and paying down debts if possible.
3. Since companies are gradually laying off the Universal credit scheme isn't completely overloading and people are applying in much bigger numbers but spread out.
4. Once employers know that they will have to pay (currently around 8 MILLION PEOPLE) are furloughed (BBC News today)..... the numbers laid off will increase dramatically - high unemployment is cominng with higher levels of debt and mortgage/rent arrears... hence in months to come (not seeing much of it yet) the effects will be huge.... and property prices will come down.

I am constantly amazed at how naive many people are about how businesses operate. Of course there are some bad employers but in the vast majority of cases employers and business owners do not want to downsize.

Many businesses have had no income for 3 months and are predicting huge reduction in turnover until the end of the year due to social distancing, public confidence and recession. Many are also facing increased operating costs with new procedures, PPE, etc

These businesses still have overheads. Many do not have the funds to pay the payroll as no money is coming in and certainly cannot be taking on new debt in these uncertain times, even if banks were happy to lend.

Saving costs, including redundancies where there is reduced work, is the only way they can remain afloat. Some people seem to think businesses have bottomless money - this simply isn’t the case.

What BA are doing is way beyond having to make redundancies. They have massive reserves and have paid our huge bonuses to their CEO, and now they have the perfect excuse to fuck their employees over as they have done before.

The furlough scheme was to hopefully ward off redundancy but there was no way it could absolutely avoid it for all. If a business has to close or scale down because of this that’s the reality. At least people have been able to keep being paid.

I work for a ‘BIG’ household name company

We have made around 30 people redundant form around 5k staff and redeployment of a large number to other areas

We have used the furlough scheme
If we hadn’t then I would have been making people redundant (or more likely due to the nature of my department ending people’s probation period which is worse as no notice or payouts etc) back in March

Thankfully the furlough scheme has given us some liquidity and a buffer to ensure we protect almost 5k jobs. For now

I hope that companies that make people redundant won't be paying bonuses to CEO or dividends.... but they will - that is seen as a right whereas redundancy is excused over profit for shareholders and bonuses for CEO/directors etc

I am constantly amazed at how naive many people are about how businesses operate.

Absolutely this!

Our company made us sign an agreement that if the furlough money is claimed back by the government in the future we would be responsible for paying it back, not them. So your proposal there would make the vast majority of our workforce owe money to the company. No thanks.

This does not sound remotely legal. Did you sign it? Did you speak to a union or employment lawyer first?

@Flimflamfloogety

I agree with you.
I personally, don't agree with the furlough system. It was set up with no terms and conditions. No repayment etc expected so has.just saddled the UK with huge debt for no return and for at least 50% of the furloughed has just delayed the inevitable.
It would have been a damned sight cheaper to have had those claim benefits from the outset if the firms had made redundancies then. The benefits cost would have been significantly cheaper!

Now we owe trillions and woop pay out for benefits too.

Let alone the government will now be paying the redundancy in effect too.

Absolute madness. To think we're a supposedly capitalist society.

so has.just saddled the UK with huge debt for no return and for at least 50% of the furloughed has just delayed the inevitable.

SoloMummy And your proof of that is where?

Just out of curiosity, all those that said I'm BU... Do you think it's morally right or ethical that the government continues to pay the wages of those in the consultation period? Do you not think this should revert back to being the employers responsibility again?

Under normal circumstances, if an employer starts redundancies, they still have to pay the employee during the consultation (usually one month) and their notice period (usually another month).

At the start of this there were examples of companies that had paid dividends to shareholders, (not to mention the trick of buying back shares to increase value of stock) that more or less equaled the amount of government (ie taxpayer) support they were receiving.

This is not and never has been about the employee/taxpayer.

Employees/Taxpayers will either lose their jobs or be funding this far into the future and companies that survive will use future profits to pay dividends to the already wealthy, not to repay 'handouts' they received in the past.

Literally, the poor are dying whilst the rich are making a killing.

Do you think it's morally right or ethical that the government continues to pay the wages of those in the consultation period? Do you not think this should revert back to being the employers responsibility again

Interesting thing to think about.

I suppose for me my main priority is that those people are paid. I'm less concerned by whether the government or the employer does the paying.

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)

I work for a small company. I cant wfh. Technically they could have stayed open during lockdown, but with no orders since the beginning of March there was no income for the business, nor any work to do. I will be furloughed til at least the end of June.

@Iwalkinmyclothing

It's not just about who's paying though. If the employees remain on furlough they only receive 80% of their salary up to £2500... Seeing as they're being turfed out I think they should at least be paid their full salary at the companies expense for the last 2 months

This is a consumption economy and if we had let 30% to 40% of all workers be fired, like they have in the US, and go on £72 a week dole, we would have crashed our economy far far worse than we already have.

An economy is not like a household. You can't save money by paying yourself less.

@Flimflamfloogety that sounds reasonable enough; I suppose you'd have to have some cut off for which companies were big enough to demand this of and which couldn't sensibly be expected to fund it.

The whole thing is depressing. Even more so , I am finding, because so many people refuse to accept that widescale redundancies and failing businesses are about to happen. I know 2007/8/9 was bad, but this to me feels like it's going to be worse. (I really hope I am wrong).

@zscaler if you're talking to me, yes, the union said to sign it. The company always goes through an HR consultant to make sure everything is legal and the union didn't find any issues with it. If we didn't sign, we would not get the furlough pay.

I’m sorry I really don’t understand your logic - the furlough money is going to the employees so they can pay their rent / mortgage / buy food etc ..not the employers. The employers just would have made these people redundant so they would have had to claim unemployment. If employers aren’t earning money during the lockdown to cover wages...they aren’t earning money to cover wages. Furlough people have not been working - the suggestion an employer with no income pay staff who are not working...it’s just bizarre to me that you think employers should pay the furlough scheme back.

This is a consumption economy and if we had let 30% to 40% of all workers be fired, like they have in the US, and go on £72 a week dole, we would have crashed our economy far far worse than we already have.

However, the reality of the situation might have hit home, and allowed for a proper public cost-benefit analysis to have been discussed. There is a catastrophic cost to be paid for the lockdown. Many people are blissfully unaware, think they can have a few months paid holiday, and we'll all just pick up where we left off. It's only once a tsunami of redundancies and poverty arrives that they will accept this, by which time it will be too late. The political consequences when people realise the truth are likely to be ugly.

• 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. *

Absolutely this, it's obvious this is going to happen.

People shouting about the "second wave" and don't relax lockdown should more than likely be thinking about the first wave of redundancies, the next few months are going to be brutal.

It was always clear the a huge percentage if furlough would end up in redundancy. It was a last desperate step to reduce the numbers a but, and give the people a chance to prepare (start some new qualifications etc).