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Coronavirus: New rights for workers could prevent mass job losses

Tom Belger
Finance and policy reporter
TfL reported falling usage after the government urged people to avoid non-essential travel. (PA)

The UK government should introduce new rights for workers and pay their wages if firms struggle to do so during the coronavirus crisis, according to a think tank.

Employees should be entitled to a new ‘statutory retention pay’ (SRP) if work dries up because of the virus but employers wish to keep them long-term, a new report argues. Staff would receive at least two-thirds of their wages, with the state refunding much of the costs.

The Resolution Foundation think tank said it would help prevent a damaging rise in unemployment that could disrupt firms and leave long-term scars.

Read more: UK chancellor under fire for promising firms £330bn but families £500m

Companies need “swift action” to cover wage costs and families need reassurance they will not see a long-lasting drop in their incomes, it said on Thursday.

The foundation argues the government’s plans to provide bridging loans are “unlikely to be sufficient” as firms cannot be sure a downturn will only last a few months. Firms are particularly likely to shed jobs and consumers to slash consumption if they have no idea how long disruption will last, which itself “risks a much deeper downturn.”

Read more: Coronavirus risks ‘income crisis’ for millions of self-employed workers

Sick pay also only offers limited payouts to workers who are employed, earn above a certain threshold and are off sick. No direct measures to support the jobs and wages of those at risk of losing their jobs have been proposed, with the government instead offering indirect support through £330bn ($403bn) of loans and guarantees to firms.

Chancellor Rishi Sunak also said on Thursday the government would announce new measures soon to support household incomes through the crisis, but few further details have been provided.

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