15 May 2020
As lockdown eases, companies must strike a complex balance between returning to work and protecting staff safety. DRD Partner Lawrence Dore and Analyst Geordie Hazeel examine the implications of the latest government announcements.
Hot on the heels of Boris Johnson’s address to the nation and the Government’s release of its COVID-19 recovery strategy, Chancellor Rishi Sunak announced the extension of the furlough scheme to October. A tentative roadmap back to work has been given to businesses but has been tempered by the Government’s expectation that state assistance will be necessary well into the year if companies are to stay afloat. While Sir Keir Starmer accused the plan of posing “more questions than it answers”, lacking clarity for those encouraged to return to work, one point is clear – the Government has begun the Herculean task of resuscitating a flatlining economy.
This, unsurprisingly, comes with a hefty price tag. The extension of furlough support is estimated to cost upwards of £80bn. According to an internal Treasury document detailed in the Telegraph, the total cost of COVID-19 to the Exchequer is likely to reach £300bn. With such costs looming on the horizon, it is easy to understand why the Government is anxious to restart the economy. Even the best-case scenarios look dismal.
Recent reporting suggests that the Government hopes to balance the books through a combination of raising corporation and income taxes, scrapping the pension triple-lock and instituting public-sector pay freezes. The Chancellor’s preferred antidote, however, is for the economy to grow; a V-shaped end to economic stagnation and a resulting boost in tax income as the only real way out. But is this feasible with uncertainty rife in the business community and a fearful public in favour of a longer lockdown?
As the Government strikes out into new fiscal territory, so too do businesses seeking to navigate the new guidelines and resume business. As DRD Partner Duncan Fulton wrote last week, they face a set of unenviable choices.
In recent weeks, we have seen a significant shift in activity amongst many of our clients. Managing the immediate fallout from the pandemic has given way to the task of understanding the new rules on businesses, the new shape of the UK economy and the realities of returning to work as lockdown eases.
There are clear opportunities to shape government policy too – in every sector, companies are requesting specific forms of relief, reacting to new forms of assistance and recommending measures necessary to operate during the pandemic. On the back foot, the Government is keen to not only impose new rules to ensure safety, but also listen to businesses and relax or amend existing rules if it eases the burden. For instance, this week we saw Housing Secretary Robert Jenrick encourage the construction industry back to work by coupling imposed social distancing with a freedom to work extended hours on site and the ability to defer some Community Infrastructure Levy payments.
Demonstrating a renewed focus to engage with the Government to help their industries, we have found businesses keen to support the recovery plan and resume operations.
We have also seen very real concerns, however, from employees fearful of unsafe working conditions and employers concerned about protecting the wellbeing of their staff. Recent surveys indicate widespread anxiety among workers concerned about their rights, safety and risk of contracting the virus.
Critics of the Government’s guidelines question their effectiveness and clarity in sectors such as construction, manufacturing and education. Well-founded worries range from class sizes in schools and access to PPE to the risks of commuting via public transport. It is unsurprising that the Citizens Advice Bureau has received a marked uptick of enquiries and legal charities such as LawWorks are likely to be inundated in the coming days.
There has been a lot of comment about how employers can minimise risk, whether it is fulfilling obligations to maintain appropriate social distancing and workplace safety, staggering working hours or initiating redundancies. But while the landscape has changed dramatically, employment law has not, and the pre-Covid rules and regulations designed to protect employee rights and safety remain unchanged. Employees are entitled to refuse to attend an unsafe workplace or sue for unfair dismissal if made redundant as a result of such refusal. Sarah Albon, CEO of the Health and Safety Executive, has made it clear that the watchdog is ready to prosecute if necessary. This has led to calls for protections to be brought in to ring-fence liability and shield employers from such claims. In the absence of this it seems unavoidable that we will enter a highly litigious environment.
Companies face the unenviable challenge of balancing the urgent need to get businesses up and running again versus the necessity of protecting their workforce. Even as the Government tries to ensure companies avoid a “damned if you do, damned if you don’t” situation, employers face a reputational and legal minefield.
Only time will tell if this will be sufficient to make many businesses pause, continue to receive government assistance and let others take the first uncertain steps into the unknown. If this is the case, the Government faces yet another hurdle in its efforts to put jumper cables on an afflicted economy.
returning to work, returning to work