At Community, we stand fully behind the TUC’s call for a permanent short-time working scheme, which will help stop workers from losing their jobs in times of crisis. The proposed scheme would be similar to the coronavirus job retention scheme (furlough scheme), which is about to wind down, and mirror similar systems in 23 other countries around the world, such as Germany, Japan, and several states in the USA.
It would act as a stabiliser, helping to prevent big jumps in unemployment in the immediate wake of a crisis.
For workers, the benefits are clear. Those affected would work a limited number of hours and be paid 80% of their wages by the government for the difference. We’ve seen how well this works with the success of the furlough scheme during the covid-19 pandemic. But a new scheme could be even better, ensuring that anybody who isn’t working for a significant part of their usual hours gets access to funded training, helping them adapt as the economy changes.
The proposed scheme would protect against long term unemployment. We know that losing your job is one of the most unsettling things that can happen and exiting in a period of joblessness can be difficult.
These proposals would help prevent people from losing their jobs. And a furlough scheme would pay more than unemployment benefits, protecting people’s incomes.
Furthermore, a permanent short time working scheme would preserve the progress we are making towards equality, ensuring disadvantaged workers would retain their jobs. Past and present crises have only widened existing inequalities. The data shows that women, disabled workers and BAME workers are more likely to lose their jobs first in a recession- reversing the progress that’s been made.
The benefits for businesses are clear too. Too often businesses are forced to make redundancies as a snap reaction to crises, because they cannot afford to keep everyone on when cashflow takes a hit. This costs businesses more in the long run, as they must pay redundancy payments to eligible workers. And, after the crisis, they’re hit with more costs, as they need to recruit to refill the gap.
The proposed scheme is good for the government and our national finances too. By ensuring that workers are still receiving an income and reducing numbers claiming unemployment benefits, the scheme contributes to the stabilisation of the economy. Workers on a short time working scheme will earn more than those on unemployment benefits, and will therefore spend more of those wages, supporting economic recovery. Because short time working would only come into force during a crisis costs are low in the good times.
The scheme would not be a free for all and would only be brought in when a business is facing serious disruption, whether that’s thanks to a financial crisis, climate change, technological change, or unknown unknowns.
To manage these decisions about who can use the scheme the TUC has set out proposals for a tripartite governing panel, made up of businesses, trade unions, and government. Worker consultation would be a mandatory part of the process, and businesses accessing the scheme should also be encouraged to improve their working practices.
If enacted, this would be one of the most significant examples of social partnership working in the UK.
At Community we believe that we get better outcomes when everyone comes to the table in this way.
A short time working scheme is needed right now. With around 1.9million people still on furlough, there is a very real risk of a spike in unemployment as the scheme comes to an end. By continuing to protect jobs through a new short-time working scheme the government can prevent this from happening.
And this scheme will be needed in the future. We don’t know what the next big recession or crisis will be, but we can put protective measures in place to ensure that when it does come, we can weather the storm, together.
If you are a member of Community and need help or advice, please contact us at email@example.com or on 0800 389 6332.