In The News
On 4th April the Government published an update on the Coronavirus Job Retention Scheme.
The full details of the changes are set out below.
Summary of Changes
The changes include clarification of the following points;
Where this occurs, even if the individual does so even if the employee is not a full time employee, no furlough payments will be possible.
These are not considered activities that breach the rules that define working such that as far as possible these activities, in so far that they can continue, are encouraged.
A record of this communication must be kept for five years.
These clarifications are extremely helpful and will provide relief for many employees and employers alike. In particular, the confirmation about the nature of salary that can be furloughed, to include contractual payments that form the essential ingredient of the sales workforce, is very welcome as it was by far and away the most problematic issue for dealerships. Many were rightly concerned that our interpretation of the inclusion of commission payments within earnings was not included in the government guidance and it is very pleasing to see that amend.
The guidance can still be read as somewhat contradictory, excluding discretionary bonuses from earnings. Our interpretation is that :
It is up to each retailer, knowing the evidence they have to be able to respond to any subsequent questions from HMRC to determine the extent to which the commissions are compulsory.
Having overcome this significant concern, we still have a major issue with timing. There is still no news as to when the “portal” will open to collect the payroll data, nor is there any new proposals setting out how and when payments will be made available. Dealer groups should be planning to have to make the April salary payments without receipt of the furlough cash in case the government systems do not mobilise fast enough.
Finally, the nature of furlough payments has touched on a raw nerve over the weekend with the debate centring upon Premier League Football Clubs and their intention to furlough non-playing staff whilst maintaining the salaries of footballers. It raised the question of ethics and doing the right thing with regard to furlough payments. This is less obvious a banana skin for motor retail groups, however the cash-rich, well-funded businesses should be aware of any potential PR backlash.
The nature of the multiple audiences watching a business and their decisions makes corporate life that much more complicated. It makes the decision as to furloughing staff very important because great damage can be done before a business has a chance to explain what they have done and why. Public opinion, even if it is based upon inaccurate information (fake news?) can be very powerful and difficult to reverse.
Notwithstanding, what is important is to achieve the original aim; to protect businesses and jobs and ensure that we are in a position to resume business once the crisis passes.
If you have additional questions which have not been addressed above please contact Chris Cummings on 07896 117908 or by email email@example.com