With the extension of the nationwide lockdown announced earlier this month, government has decided that furlough (Coronavirus Job Retention Scheme) is to be extended by one month until at least 30 June. The scheme to financially support businesses having trouble to pay their furloughed employees’ wages was initially set to terminate by the end of May.
Chancellor Rishi Sunak announced that the extension was decided upon in order “to support jobs and businesses through this period of uncertainty”. Global fears of downfallen economies have had businessowners on the edge as apprehension on financial stability and continuation of business continues to mount. This was further spurred by concerns voices by CBI’s director-general Carolyn Fairbairn, who stressed that companies effecting more than 100 redundancies must comply with the 45-day consultation period required by law. To complete this by the beginning of June meant having to commence consultations by 18 April.
Stakeholders have thus welcomed the extension with much fervour, as employee payroll dues are beginning to hold businessowners ransom in this stultified economy which has significantly limited active cashflow. The extension therefore provides a significant breather space for businesses to survive on state aid whilst waiting out the future developments over the ongoing global pandemic, whilst providing greater peace of mind to employees and their dependents. The Office of Budget Responsibility predicts that over 2 million people may find themselves unemployed by the end of June, and around 195 million worldwide as per ILO studies.