Food producers voice concerns job retention scheme could harm recruitment

30 Mar 2020 By Siobhan Palmer

Experts urge businesses utilising furlough leave to instead consider cooperating with food firms to redeploy staff to help meet increased demand

UK food producers have voiced concerns that the government’s job retention scheme may make it harder to recruit staff quickly to meet increased demand.

The job retention scheme allows workers who have been temporarily laid off, or furloughed, to claim up to 80 per cent of their salary while not working, and has been widely welcomed by both employers and employees. 

However, many businesses in the food production sector – which has seen increased demand as customers stockpile food or turn to supermarkets as pubs and restaurants shut – were expecting to be able to increase their own workforces by hiring staff made redundant in the struggling hospitality sector, and have raised concerns that the retention scheme could prevent this redeployment of labour.

Some employers in the sector have managed to find the labour needed. Today (30 March), retailer Co-op announced it had successfully hired 5,000 temporary staff in just a week after putting a call out for applications from workers who had lost their jobs as a result of the coronavirus outbreak.

Similarly, employees facing job losses at easyJet and Virgin Atlantic are being offered the opportunity of redeployment within the NHS, into roles staffing the new Nightingale Hospital in east London. NHS England said many airline workers were first aid trained and had security clearance, and those who signed up would support nurses and clinicians at the new field hospital at the ExCel Centre in London’s Docklands area. 

Virgin reported it had written to around 4,000 employees about the opportunity, and easyJet said it had contacted 9,000 of its UK-based staff. Virgin said other workers would be paid through the job retention scheme system, but it is as yet unclear how many will take up this offer.

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However, other employers looking for additional labour have reported finding it harder than expected. Denis Lynn, chair of food supplier Finnebrogue Artisan, told Buzzfeed that his company was finding it impossible to hire workers from hospitality businesses, and were therefore facing major staff shortages, because of the rules around the government’s furlough scheme, which stipulate that those temporarily laid off must not work for another employer in the hours they were contracted to work for their original organisation. He said the scheme “killed [Finnebrogue Artisan’s] plan to second hospitality workers to food factories”.

Similar concerns about food distribution in the UK were recently highlighted by the country’s farming leaders. The Country Land and Business Association said a “land army” of workers unable to carry out their previous jobs because of the coronavirus crisis would need to be deployed to carry out labour usually done by seasonal labourers.

Andrew Crudge, employment and immigration associate at Trethowans, said while government guidance was very clear that furloughed employees could not undertake any profitable work for their employer, it was less clear whether they could obtain a job with another company if outside their contracted hours. “It may be possible to take on new paid work outside the employee’s normal working hours, but it is unclear at this point whether that would invalidate the furlough status or not,” he said. 

Crudge warned that employees put on temporary leave would need to be careful when considering alternate paid work. “A furloughed employee will remain employed throughout the furlough period with that employer, and so the terms of their employment contract will continue to apply,” he said. “The contract will often prevent them from working for another employer and, if they do so, they may be subject to disciplinary procedures.”

Carl Atkinson, partner at gunnercooke, said seconding staff to other industries would require cooperation between businesses and for companies “to look beyond the easy option of simply putting staff on furlough leave”.

Atkinson added that the portal through which employers claim government wage support for furloughed workers may not be running smoothly until May or even June, and until that time organisations would still need to foot the bill for staff wages. “A secondment could save the original employer the immediate staff cost of the employees and the additional 20 per cent contribution they may be making to top up,” he suggested.

Speaking to People Management, James Durrant, co-founder of Mustard Foods, said his business had yet to encounter any problems recruiting additional labour as it was able to work with self-employed chefs to keep the business running. But he added that he believed this was unlikely to to be the reality for many others in his industry across the UK.

Durrant said Mustard Foods had moved from supplying UK restaurant chains to producing frozen meals and hot food for NHS staff, but that other factory kitchens he reached out to for help had closed shop completely. “They didn't use these words, but all of them referred back to directors and financial directors who've said no,” he said.

“We have been bashed hard by the fact that... industry leaders that we've worked with for years are unwilling to open a factory or a kitchen to help us feed the NHS,” Durrant said, adding that business closures and waning capacity in food production were going to hit vulnerable people, who rely on donated food, the hardest.

The environment secretary, George Eustice, said the government would be “looking at other ways to make sure farmers have the support they need ahead of the busy harvest months while also keeping workers safe and protected”.

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