Compass Group Joins List of Firms Not Claiming Furlough Bonus

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22 July 2020

Compass Group, the UK’s largest food and support services company, has confirmed that it will not be taking up Job Retention Bonuses for any of its employees.

21,000 Compass staff are currently furloughed on the Coronavirus Job Retention Scheme, meaning the company could have benefitted from of £20 million from the new bonus.

Other businesses that have publicly confirmed that they will not claim the furlough bonus include: Rightmove, Primark, John Lewis, Laing O’Rourke and Kier.

 

“Businesses which are in dire straits as a result of COVID-19 have, by and large, already taken steps to reduce headcount and streamline their services.  A bonus that they won’t see until January 2021 is unlikely to have much, if any, impact on those decisions.”

– Prettys Solicitors Employment Team  

 

 

Good Corporate Citizenship? 

 

Compass Group has not expanded on the reasoning for its decision not to claim. Sheilah Cummins and Matthew Cole, from Prettys Solicitors’ Employment Team, predicts that the reasons behind such business decisions are based  upon “good corporate citizenship”:

“Some businesses may wish to keep their options open with regard to future redundancies, others may be worried about the additional attention taking the bonus may attract from HMRC.   We think the reason is, ultimately, more simple than this.  The reality is that the Job Retention Bonus being offered will make very little difference to a Company’s balance sheet. 

Businesses which are in dire straits as a result of COVID-19 have, by and large, already taken steps to reduce headcount and streamline their services.  A bonus that they won’t see until January 2021 is unlikely to have much, if any, impact on those decisions.  

“Other, larger and more stable, business such as the Primarks and John Lewis’ of this world, as well as other high-profile, high street chains know that they are expected to weather the COVID storm better than their independent, and smaller, counterparts. 

“To this end, they may see their rejection of the Job Retention bonus as their civic duty and an example to others of good corporate citizenship.”

 

Is it Enough to Protect Jobs?

 

The scheme is, of course, not without conditions. Employers can bring back someone who was furloughed and get paid a £1,000 bonus per employee. They will need to be continuously employed through to January 2021 and the employee must be paid at least £520 per month on average.

Not everyone agrees that the scheme will be enough to help stimulate employees’ return to work, with the Chartered Institute of Personnel and Development (CIPD) stating they were not convinced the bonus “will provide sufficient incentive to encourage employers to bring workers back from furlough beyond those they would be planning to bring anyway.”

The CIPD believes that a simpler way of protecting jobs would be to extend the Job Retention Scheme for key sectors such as hospitality and leisure beyond October.

Picture: A photograph showing someone placing some coins into a Piggy Bank

Article written by Ella Tansley | Published 22 July 2020

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