Trades Union Congress (TUC) calls for permanent furlough scheme

Highlighting the effectiveness of the furlough scheme, the TUC has called on the Government to build on its success by setting up a permanent scheme to deal with major disruptions to jobs in the future.

This could include the transition to net zero, future pandemics and technological change.

The union body wants the Government to establish a permanent short-time working scheme as “a post pandemic legacy” to help protect working people through these periods of future economic change.

While far from perfect, the furlough scheme is one of the major successes of government policy during the pandemic, the TUC notes, protecting millions of jobs and livelihoods.

In a new report, “Beyond furlough: why the UK needs a permanent short-time work scheme”, it says the case for such a scheme is clear, citing significant benefits for workers, firms and the Government itself.

The report argues that the scheme would protect workers’ incomes – particularly as short-term working schemes are usually more generous than unemployment benefits – and prevent widening inequalities as it would protect women, disabled workers and BME workers who tend to lose their jobs first in a recession due to structural discrimination.

For employers, the TUC says that such a scheme would produce significant savings on redundancy, training and hiring costs, as they enable firms to keep skilled workers on their books.

It believes that the scheme should be run by a tripartite, panel bringing together unions, business, and government, which should be tasked with designing its criteria.   

Outline of the scheme

The TUC has taken account of best practice from existing schemes around the world and suggests that the UK scheme should ensure that:

• Workers continue to receive at least 80% of their wages for any time on the scheme, with a guarantee that no-one will fall below the minimum wage for their normal working hours;
• Any worker working less than 90% of their normal working hours is offered funded training;
• Firms set out a plan for fair pay and decent jobs;
• Firms commit to paying their corporation tax in the UK and do not pay out dividends while using the scheme;
• The scheme ensures full flexibility in working hours; and
• There are time limits on the use of the scheme, with extension possible in limited circumstances.

TUC General Secretary, Frances O’Grady, said: “In a changing and unpredictable world – as we battle climate change and new technologies emerge – a permanent short-time working scheme would help make our labour market more resilient and protect jobs and livelihoods.”