Coronavirus: Does the leave program end too soon?

0
13


Image copyright
Block blinds

Legend
Blinds block suitable for the manufacture of PPE at the start of the pandemic


Few businesses in Northern Ireland can say they thrived during the pandemic.

Obvious exceptions are manufacturers, like Bloc Blinds, who quickly reoriented their factories to produce vital personal protective equipment (PPE).

The IT company Kainos was also able to continue to grow.

In an unscheduled market update this week, he said trading has been strong.

Annual profits were going to be “substantially” ahead of previous forecasts, the firm said.

The stock market liked this story and the company’s valuation jumped well above £ 1billion.

Dividend debate

Kainos said things went so well that he was withdrawing from the government’s leave program and returning all the money he received.

This amounted to around £ 400,000 for 131 employees who had been put on leave for two months when the lockdown began.

The company had no legal obligation to return this money.

However, the directors seem to have concluded that it was the right thing to do morally and reputatively, especially since they also pay a dividend to shareholders.

This may set the bar higher for other companies: if there is enough cash to pay a dividend, do you also have to pay back the vacation money?

Image copyright
Jason Alden

Legend

Hospitality industry laid off large numbers of workers during Covid-19 crisis


Few businesses in Northern Ireland are likely to find themselves in this situation.

Analysis released this week by the Economy Ministry suggests that at the end of June, more than 240,000 employees were on leave.

This represents around 30% of total employee employment, although in some industries it was much higher – 61% in arts and entertainment, 70% in construction and 78% in hospitality.

Soaring unemployment

These numbers will have declined as the economy reopens, but they show how important the holidays have been in avoiding mass layoffs in parts of the economy.

Which of course raises the question: what will happen when the permission runs down and ends in October?

“Rising unemployment,” was the response of a respected think tank this week.

In its forecast for the UK as a whole, the National Institute of Economic and Social Research (NIESR) suggested the unemployment rate would hit 10% this year, higher than if the leave were extended.

NIESR called the October deadline a “mistake”.

Legend

Chancellor Rishi Sunak presented the leave program


“The program was intended by the Chancellor to be a bridge through the crisis and there is a risk that it will end prematurely,” said Garry Young, deputy director of NIESR.

“It was an undeniable success in terms of keeping employees on leave attached to their jobs. ”

The Treasury insists the time is right.

“It is not in anyone’s long-term interest that the program continues forever and rightly so that state support is slowly reduced as we focus on returning employees on leave to work,” did he declare.

The next wave of unemployment will not be evenly distributed.

Workers at companies like Kainos should be fine.

Analysis by the Ministry of the Economy, which examined online job vacancies, found that while all sectors have seen a sharp decline in job vacancies since March, “IT and finance are still recruiting. in relatively good numbers ”.

LEAVE A REPLY

Please enter your comment!
Please enter your name here