12th May 2020

Navigator News – Updated bulletin following statement from PM

Following the broadcasts by the Prime Minister and the First Minister yesterday, the latest update is that matters are largely “as you were” – at least for now – in Scotland as the fight against coronavirus continues.  Leaving aside the differences which have now emerged between the guidance for England and the rest of the United Kingdom, it is clear that we have a long fight ahead and even though the Prime Minister set out some helpful longer term targets to encourage the country to stick to the rules, his language made it very clear that those are not set in stone and will have to be delayed if the scientific figures and analysis don’t stack up.

From the standpoint of business owners thinking about how best to help employees and save their business, no mention was made of the furlough scheme.  Not a word about it being adjusted, either in terms of the detail of who can apply, what they can apply for or how long the scheme will run for.  Further updates are highly likely and the Chancellor is expected to speak about this week with Tuesday (12th) looking like the most obvious day.  Current thinking suggests the scheme will run longer but on a reduced basis (a new concept of part-time furlough perhaps?).

For now, perhaps the most interesting aspect of the PM’s broadcast was the apparent open invitation to manufacturers and construction companies to get people back to work.  His message to business was justified by the logic that these were jobs that could not be performed at home.  A cynical view would be that this was simply an attempt to manage the rapidly increasing cost of the CJRS and those were two obvious groups to mention when others are in the same boat but were not referred to.  Given that social distancing remains in force and the clear recommendation to employees was to avoid public transport, questions are bound to be asked in England about how workable this actually is and what employers are supposed to do with employees who don’t want to return for fear of being infected.

Fortunately businesses in Scotland are spared having to make that difficult call for now but other challenges remain, particularly having to look after employees who are on furlough leave and finding that difficult.  In the distance, possible redundancy exercises will have moved a step closer as the end of the scheme looms large on 30 June 2020.  Friday (15th May) is still a significant date in terms of mapping out the future given the timescale of collective redundancies and this week will be an important week for employers to review any plans about what is happening going forward.

Beyond that, everyone in Scotland needs to carry on with the current rules and focus on staying in the house as much as possible.  Assuming progress is made, it is to be hoped that we are able to mirror what happens in England, just doing it all 2 or 3 weeks later (or more) and possibly learning from that experience.  If that puts us in a better position as a result, any continuation of full lockdown will be worth it.  Serious challenges lie ahead trying to reverse the lockdown process and that has to be the focus for the entire nation going forward.

12th May 2020