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

Also, everybody NOT expecting a massive downturn in business should really check their connection to reality.
My company started to frantically prepare in February, to my knowledge the only ones on furlough are the catering staff and some flagship store employees (maybe 50
out if 4000 employees in the UK?).
We are one of the least impacted companies in the uk, were well prepared, and will still see profits reduced (and we knew that would happen in february ).
For anybody in travel or hospitality (or traditional highstreet) its only about surviving at all anymore, If they manage to survive, they‘ve done very well

You may want to read government guidelines concerning furlough and redundancy. Furlough is permitted to be used prior to the redundancy. The government supports this method. As someone being made redundant it gives me an extra month (all my company will allow), so hopefully by September things will calm down for the job market. My company is in travel and insurance. On paper six months ago we were set to make our first (whatever comes after millions) billion(?🤦‍♀️). At the moment they have enough cash to pay wages until Sept October time. They didnt need to use their credit facility till now. Top earners have had to take pay cuts. So sorry, no, yabvu.

But many of the companies just wouldn’t have the cash to pay the salaries, those where the revenue has gone to virtually zero. How are they supposed to start paying the salaries as you suggest?

Furlough payments primary beneficiaries are employees, not companies.

If companies were forced to pay money back or more out of their pockets, they would end up having to get rid of more people, or closing.

Lots of businesses that are getting rid of staff now are doing so, because they are closing.

Furlough was to delay people losing their jobs. That was the point. I would rather see companies who have used the furloichscheme to be looked at. So many had their staff on furlough, yet pressured their staff into working.

I’m no fan of big companies but that doesn’t seem logical.
This pandemic is beyond any of our experiences. The govt imposed lockdown at almost no notice, giving companies little time to plan.
Companies had no idea what a post Covid market would look like so furloughing employees they had previously needed was sensible.
I manage marketing for a small company, and am furloughed. 30% of my work is event management. If I restart work, that element will be missing although we didn’t know that 2 months ago. When I go back I may be offered part time, I may be redundant.

And staff accrue holiday during furlough, three months on furlough gives me holiday worth £1100. It would be more cost effective to have made me redundant in April than keep me on.

But the furlough funds go straight to the employees, the company doesn’t keep a single penny.

The company covers the actual redundancy pay themselves - that cannot be claimed back. So whichever way you look at it the company suffers the same loss whilst the employees get some wages coming in from the government until their employment ends.

Although the furlough bill is very large, this is not the one single cause of economic problems.

Just because it is a big company it doesn’t mean they can afford the big expense of a big payrun for nothing. A big, or small, company is not a charity.

I wonder if there will ever be an audit process of claims by companies.

I know of an employer has offshored uk work to India (where Indian staff were very quiet but where there's no equivalent to furlough) to then put the UK staff who's work was offshored on furlough.

The OP’s post just show that some people have absolutely no idea how bad the downturn is going to be. How on earth do you think EasyJet and British Airways can be operational with no one flying??????? Any requirement to bleed cash by paying redundancy would simple lead to more redundancies.

Firms aim to make money with supports job, pays salaries and taxes. These fund the NHS, schools, pay benefits etc. Without firms making profits we would all be subsistence farmers.

Government handouts are often abused, there has been huge financial fraud already. Companies claiming money but the staff are being mad to work, etc

Lots of companies closed or furloughed staff because they had no business, not because the government required them to close.

I'm self employed and have had no business at all since March. Zero. Zip. Zilch. DH has had to take over paying for everything as I've had absolutely no income since and I predict I'll be quiet for months and months to come.

Lots of people in my line of work (dog walking) are closing for good. Nobody was interested in continuing to use them through lockdown as they were home with their dogs. But 2-3 months with no income is just too much for them to cope with so they're not returning to work. The SE grant didn't kick in until recently so many were living off loans and credit cards to cover bills as their clients just didn't need them anymore.

I'm sure there are some companies who took the piss but for the majority it would have been furlough or close doors for good.

The furlough scheme was never going to save every business

The hope was that it would

a) save some businesses
b) protect NHS - keeping many people compliant with staying at home
c) alter the time frame over which businesses collapse, so it wasn’t one peak, and
d) not have lots of people attempting to job hunt whilst many workplaces paused (spread the arrival
of those seeking work over months, not one shape peak)

I don’t think struggling businesses should be forced to repay anything. Those making layoffs will be those who cannot afford to keep people on. Forcing additional payments will
only fuel more redundancies, and perhaps drive a surviving slimmed-down business into non-viability. With further redundancies and no means to fund them (another tab for the Govt to pick up)

Furlough was to keep people compliant in lockdown and postpone inevitable redundancies until their compliance was no longer needed

A big business is just a small business that did well at some point, they're not in league with the devil!
Furlough was a breathing space, a chance to take stock. The future is clearer now and for big and small companies to survive, job losses are inevitable. It is a tragedy!

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).

Under normal circumstances the worker would be working. They aren't. Under normal circumstances these workers would probably be gone already. They aren't. You may not have noticed, but these aren't normal circumstances.

I can only assume that you think you are in a "safe" job. If things get as bad as I think they will, there may be none of those left.

But when you look back to the start and where we are now, lots has changed. At the beginning we thought we would need to furlough for a month or two. Right now 50% of our staff are furloughed and it's likely that 5 may need to be let go (out of 30 staff) as business has not picked up and our turn over is substantially lower than pre-covid. In our case I think we'll be fine as I think people will start buying again in September time but if the don't I can't keep everyone on.

I couldn't predict that at the start.

I know an events company that is about to go bust - staff furloughed, now no jobs.

I know a business travel company that will likely not be working again.

The likes of BA will need to cut back dramatically as this awful disease has changed the face of travel for the foreseeable future. My parents (over 70, health conditions) will not fly again in their lifetime and people are dramatically rethinking foreign holidays. No one can get insurance for pandemic (including treatment) anymore - which means no one with a health condition can travel. Frankly I wish them well, even a big business like BA needs to survive and needs to do what it can to keep some of its staff employed.