Retail leaders in the UK are expressing concerns and seeking clarity on the future of the Job Retention Scheme (JRS), as fears of potential job losses mount once lockdown measures are eased. Currently, the JRS allows businesses to furlough employees while the government pays their salaries. However, there are worries that the scheme could be abruptly withdrawn once non-essential shops reopen.
The ongoing pandemic and financial uncertainties have significantly impacted consumer confidence, making a swift return to normal retail operations unlikely. This could pose a significant problem for smaller businesses if government support is suddenly withdrawn. As a result, trade bodies and retail executives are calling for more flexibility in the scheme. They are suggesting options such as tapered or partial furloughing to accommodate a gradual return to normal business activity.
While larger retailers may be better equipped to weather the storm, CEOs of companies like Next and Dixons Carphone are also expressing concerns over potential job losses. Lord Wolfson of Next and Alex Baldock of Dixons Carphone have emphasized the urgent need for information on the government’s plans for the JRS. They warn that a sudden end to the scheme in June could put thousands of jobs at risk.
When shops eventually reopen, strict social distancing measures are expected to remain in place, limiting the number of shoppers and potentially requiring fewer staff. The Treasury is reportedly considering a more flexible furlough scheme, which would provide ongoing support even as workers are brought back part-time.
However, employment lawyers have issued a warning that without an extension of the JRS beyond June 30, some businesses may be compelled to initiate major redundancy programs shortly after reopening. The consultation process for companies laying off over 100 employees can take up to 45 days, and for non-unionized employees, the process might be even longer. This means that if the JRS ends in June, companies would need to start the consultation process in May, resulting in potential layoffs as early as July.
Although Lord Wolfson applauds the government’s swift implementation of the JRS and other support measures, he stresses the importance of clarity regarding the plan for July onwards. He, along with Baldock, supports a gradual reduction in government relief, rather than an abrupt cessation of support.
As the retail sector prepares to navigate the post-lockdown landscape, it is crucial for businesses to have a clear understanding of the JRS’s future. This will enable them to make informed decisions about their staffing levels.