Hundreds of thousands of workers, across all sectors, are being failed by the Government’s Job Retention Scheme, designed to help companies hit by the Covid-19 crisis.
Treasury Select Committee member Rushanara Ali, MP for Bethnal Green and Bow, has written to the Chancellor demanding urgent action before hundreds of thousands are thrown into even greater financial difficulty.
The problem is that the cut-off date of 19 March for a worker to be eligible for payments under the scheme does not take into account hundreds of thousands of workers in the real, flexible economy. Rushanara Ali MP is calling on the Chancellor to shift the date to the end of March, thus protecting thousands of families.
The Government scheme does not take into account the significant numbers of employers who submit Real-Time Information (RTI) to the HMRC, and add employees to their payroll at the end of the month. This means many people who are starting a new job will still be ineligible under the government’s scheme.
While there is the option for those who have been made redundant or stopped working for an employer between 28 February and 19 March to approach their previous employer to be re-employed and furloughed, reports suggest that often these requests are being refused.
During a Treasury Select Committee session on 21 April, Kate Nicholls, the CEO of UKHospitality revealed that between 350,000 and 500,000 people in the hospitality industry may not be eligible for the scheme. This represents a huge number of workers and their families placed in financial peril.
Tens of thousands of hospitality workers who are eligible will only receive half of their wages due to service charge, cash tips and commission being excluded from the scheme.
The tourism industry is also hard hit. In 2017, the ONS estimated that there were around 380,000 seasonal workers in the UK’s tourism industry. The contracts of these seasonal workers often start in March at the earliest, leaving hundreds of thousands of people at risk of not being on the payroll by 19 March.
Rushanara Ali MP has been contacted by workers in the tourism industry who make their entire years’ salary over the spring and summer months, which they are set to lose without access to the scheme.
She said: ‘I appreciate the hard work that has gone into developing these schemes. However, the Government has failed to recognise the dire position it has put hundreds of thousands of people in. They have worked hard and paid their taxes but are now not being protected by the scheme. They urgently need the Government to step in to protect them from financial ruin at this incredibly difficult time.
‘I urge Ministers to continue to act on our feedback about the remaining problems with the Job Retention Scheme to help those who have been arbitrarily excluded. The Chancellor must listen, and act now.’
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There is a massive issue even with extending the date until the end of March. My wide and I for example were not due to start until 1st April. This is a very common start date in the industry as it normally falls just before the first busy weekend of the year for the Easter holidays.
However the biggest issue is that most seasonal employees did not even get to start this year. The BH&HPA issued a statement asking its members to close their holiday parks on the week ending 20th March. The holiday and camping parks acted on this immediately and all campsite and holiday parks had announced their closure even before the lockdown was announced by the PM on 23 March.
We received a phone call on the morning of 23rd March from our employer saying that our start date was on hold until after the crisis. The same thing has happened to the vast majority of seasonal workers in this industry. We are in limbo waiting to be called on at a minute’s notice once it is announced that the sites can reopen again. You could say we have been furloughed!
The problem is with having hundreds of thousands of contract start dates deferred, we will not actually appear on payroll for this year anywhere! So changing the date will not help us. The same is applicable for any industry start dates after 23 March.
We have been campaigning through #newstarterfurlough for an evidence based system to be put in place which has also been suggested by Ed Davey MP. Whilst we will not appear on payroll, we all have an evidence trail of job offers, salary, start dates, contracts etc all agreed before CV-19 was even heard of, as well as records of the same employment from previous years. This is the basis of our fight within the group as we do not want ANYONE to be left behind.