Protec Fire and Security: "Difficult to plan business" without clarification on Job Retention Scheme
Peter Doyle is the Managing Director of Protec Fire & Security, a company based in the North West that provides building fire safety systems designed to "save lives and protect property". The Parliamentary Review recently spoke with Peter about his thoughts on the government's "unprecedented" new scheme to protect jobs across the country.
As a large employer based in the North West with over 870 staff, we, like all businesses at the moment, are feeling the effects of the Covid-19 outbreak. As a fire detection company providing a multitude of services to our clients, our business is comprised of numerous departments, each with their own problems associated with dealing with the effects of the virus. These departments include manufacturing, call centre staff, building site installation engineers, support and field engineering, commissioning and small works.
While we acknowledge the Job Retention Scheme announced by the Chancellor of the Exchequer, Rishi Sunak, on the 20th March 2020 is an "unprecedented and bold" move, the current situation regarding the scheme presents some difficulties. Although it will almost certainly go a long way in alleviating both individuals' and businesses' concerns with regards to job security and business planning, we do feel that, without seeing the detail of the scheme, which we understand will not be operational until late April 2020, it is difficult to plan the business accordingly.
Although the scheme in its current form does provide an essential safety net to employees and businesses alike, at the moment, it appears that it can only operate when an employee has been classified as a "furloughed worker" -- effectively, someone who has been laid off.
The issue here is that if the individual is furloughed then they cannot do any work. In many cases this is a relatively straightforward exercise in that, for example, if we stop manufacturing equipment then we simply furlough members of our production staff by carrying out the following process, namely:
- Identify the affected employees who would be designated as "furloughed workers".
- Gain agreement from them of their change of status to "furloughed worker"
- They would then need to be notified of their change in employment status
- We, the employer, would then submit information to HMRC about the employees that have been furloughed, together with their earnings, through a new online portal.
However, this isn't as straightforward when dealing with site- and field-based engineers, and indeed some support staff, who are working in a piecemeal fashion up and down the country. The above process works on the premise that we can not only clearly identify those that are furloughed workers, but that there are only two categories -- those who have no work (furloughed) and those who are working.
There is, however, a third category: those that are working but are doing so in a very inefficient way, as a consequence of Covid-19.
As an example, we have approximately 400 field engineers working across the country. One region may, for example, be covered by 100 workers. In a normal week, we would plan and allocate productive work for all 100 of them for the week ahead.
However, in the current situation when they arrive on site, as planned, engineers often cannot work there any one of a number of reasons. This may be for fear of exposure by the staff on site, that the business has been closed with no notice, that they have been notified that someone has tested positive on-site or that our engineer leaves site if he does not consider it to be a safe working environment through the risk of infection and so on, and so forth.
This results in the overall productivity of this 100-person team being greatly reduced. Add to this the number of clients cancelling pre-planned works at the last minute, there is no doubt that our teams are significantly less efficient than they were pre-virus.
If this results in productivity being reduced from 100 per cent to, say, 60 per cent, the logic would be to designate 40 of the team as furloughed workers and send them home, leaving the remaining 60 to carry out the work. This, of course, relies on the remaining 60 operating at 100 per cent productivity, however, which is not the case. The inefficiencies would still be present in the remaining 60, and there is still no simple calculation for how best to optimise our workforce through the Job Retention Scheme.
Rather than furlough workers in this situation, we have taken the more pragmatic approach of maintaining employment across the team of 100 and then simply having the engineers and support staff record the time spent as a consequence of Covid-19 on their timesheets.
We would then expect to have 80 per cent of the aborted time covered under the scheme. By doing this, we not only minimise the disruption to the individual and the company, but lower the possibility of resentment from the team, where some engineers are still working while others are at home, not working, on 80 per cent pay.
Obviously, where we can furlough workers in the way the HMRC has specified, we will do so. However, in order to mitigate costs for HMRC under the Job Retention Scheme, we have adopted a hybrid process of furloughing some employees and recording the disruption caused by Covid-19 on the others.
Clearly, with over 870 employees, this problem exists across the entirety of our business, from office staff through to field-based managers and engineers to lesser or greater degrees.
We have seen some businesses decide that rather than furlough workers, so that their employees are quite rightly protected by the 80 per cent payment, they are going to ask individuals to work in the short-term for no pay. This is simply so that they can get them to continue to work, albeit in an unproductive way, rather than furlough them but then not be able to have them do any work at all.
This is a difficult situation for these businesses, as if they furlough their staff, the business will collapse, and the employee's job will disappear. However, if they continue with the employee not taking a wage, or a reduced one, then the business continues. Clearly, it is wrong that the employee should be shouldering the financial responsibility for the business, but some businesses are doing this as it is unclear how -- or if -- the scheme will provide protection for unproductive working.
We are not critical of the scheme itself -- quite the opposite -- and we do acknowledge that the scheme, as a consequence of the virus, was produced at short notice. We also know that the scheme was very much welcomed by individuals and business alike, but it is not perfect. There are some businesses out there, ours among them, who feel that clarification of this third category -- the "non-productive employee" -- would assist greatly.
You can read Protec's Parliamentary Review article, written by founder and chairman Barrie Russell, here.