Big companies slammed over furlough abuse: Firms tapping funds aimed at saving jobs while plotting to fire thousands
Boris Johnson has been urged to crack down on firms which furlough staff who they expect to fire anyway, after the Prime Minister described the behaviour as ‘cynical’.
One million firms have applied for taxpayer support under the Job Retention Scheme, which is paying the wages of 8.4m workers at a cost so far of £15 billion.
But businesses have come under fire for putting their staff on the Government’s payroll – just weeks before announcing mass redundancies.
‘Cynical’: Boris Johnson has been urged to crack down on firms which furlough staff who they expect to fire anyway
Analysis by the Mail shows British Airways, Virgin Atlantic, Tui, Easyjet and Rolls-Royce alone have furloughed around 57,000 staff between them – with the taxpayer covering 80 per cent of the wage bill up to £2,500 per person a month.
But in recent weeks they have also announced plans to slash up to 33,650 jobs, as the grounding of flights during the lockdown has devastated the travel and aviation industries.
There are growing fears that firms in other sectors which have been hammered by the coronavirus – from retailers to car manufacturers – are also preparing to sack furloughed workers.
Two select committee chairmen in the House of Commons – one Tory, one Labour – have called on ministers to ensure that the scheme is not being abused.
Labour MP Darren Jones, chairman of the business committee, accused some firms of ‘taking the mick’ by tapping taxpayer-funded schemes aimed at saving jobs to then cut them.
The Prime Minister has admitted he is concerned some firms have been using the Job Retention Scheme to ‘keep staff on their books’ as they prepare to cut jobs.
British Airways, which furloughed more than 30,000 shortly before announcing plans to make up to 12,000 redundancies, has found itself at the centre of this criticism.
As Johnson gave evidence to MPs on the coronavirus crisis on Wednesday, the transport committee’s chairman, Tory MP Huw Merriman, asked him about the behaviour of BA.
Merriman asked why it was called ‘the Job Retention Scheme when companies like BA can put their employees on furlough and then put them under threat of redundancy at the same time’.
Johnson said: ‘I am concerned about the way some companies are treating their workforce. People should not be using furlough cynically to keep people on their books and then get rid of them.’
Hours earlier Willie Walsh, boss of BA’s owner IAG, appeared to acknowledge the scheme had given it time to make job cuts.
He said: ‘It merely buys us a few extra days to address the restructuring our business requires to survive.’