Webinar: supporting SMEs impacted by coronavirus

Speakers:

• Deborah Fraser, Director for Regions, CBI (Chair)
• Chris Wilford, Head of Financial Services Policy, CBI
• Caroline Daniel, Partner, Brunswick
• Kim Sartin, Partner, Employment and Compensation, Baker McKenzie LLP

Overview:

Chris Wilford:

• The government has moved quickly to launch a range of support measures. Primarily CBILS, the repackaged Enterprise Finance Guarantee, and CBLILS. The CBI has been working with other organisations to push for further support.
• However, there are many barriers for smaller firms, such as those in the ‘stranded middle’. In addition, lots of smaller firms told us they couldn’t manage the ‘paperwork’ burden of CBILS
• The CBI pushed for loans available to small and micro-businesses through the British Business Bank (BBB), designed to be faster and approved within 24 hours. These are going live today, and demand has been huge (some have reported 2000 applications in the first two hours of being open)
• What does it entail?
  • 100% guarantee
  • Loans available from £2k up 25% of turnover (or £50m turnover)
  • Repayments can be deferred for 12 months
  • Simple application form designed for quick turnover
• We’re hoping this scheme has less bureaucracy than CBILS. £4bn has already gone out (roughly 50% of applications approved), so we’re hoping the new BBB scheme builds on this.

Caroline Daniel:

• “Crises don’t change people; they reveal them”
• This has revealed a lot to all of us about ourselves and businesses. What businesses do NOW will matter for years to come. Small companies are doing a lot better in terms of trust than big companies and government
• The media is paying attention! Scrutiny and concern is being ramped up against some companies (such as Virgin Atlantic and Tesco)
• All businesses are having similar experiences, but on different scales
• Companies CAN come out with their reputation enhanced!
• Things to think about:
  • What are you doing outside of your firm? In the wider community?
  • How are you showing you have the ‘right ethos’?
  • What assets could be used differently?
  • Show you care what your employees are doing
  • Not just about giving up loads of money
• “Speak human first, then business!”

Kim Sartin:

• What does the gradual easing of lockdown look like? What’s next for the JRS, and moving employees off furlough? What’s the workplace going to look like?
• The UK’s JRS scheme is very ‘all or nothing’ when compared with others. What happens at the end of June? Will there be tapering? Or returning to work part time?
• It’s important to think about it now because the deadline for redundancy notices (45 day notice period) ahead of the end of June is approaching fast. If nothing replaces it, businesses could face a cliff edge. If it’s not to be extended, will businesses think about redundancies?
• The JRS guidance is woolly on this, and wasn’t clear if employers could go through collective redundancies whilst employees were furloughed. The guidance now confirms you can
• Moving off furlough will come down to being fair and reasonable with employees. Who does/doesn’t come back will be driven by business need, but the explanations needed will require a ‘human touch’
• The minimum period of furlough is three weeks – so make sure you are not bringing someone back after two as it means you can’t claim
• Measures will need to be put in place for those uncomfortable returning to work.
• What does a return to work look like?
  • Idea of staggered shifts/start times, no hot desks, obligations on employees to do deep cleans, outside queuing, remote working (for those who can), social distancing in the workplace. CV risk assessments of the workplace have also been proposed (although it’s unclear what this looks like and what the obligations are)
  • Guidance does not cover employee requirements on PPE (masks, temperature checks etc)
  • Reluctant returners – employers need to be flexible and use good messaging to reassure/encourage.

Key questions we answered:

1. Can you have CBILS and the new BBB loan at the same time?

• No – the government is introducing a minimum threshold of 50k + £1
• If you have a CBILS under £50k and want to transfer to the more attractive terms of a BBB loan you can
• The BBB loan is for ‘immediate relief’.

2. Should you be contacting employees during furlough?

• It’s important to find ways of communicating with employees
• What does ‘good’ look like? Telling stories about what people are doing around the company. Shining a light on your employees is helpful. Thanking them and keeping in touch (utilising human behaviours/social activities)
• A poll of US employees found a huge disconnect in what employees wanted to know, and what the company thought they SHOULD know about
• Look at what peers/competitors have done.

3. What do you do if an employee doesn’t want to come back?

• It’s a grey area, but in practical terms it’s about understanding their concerns, engaging with the employee and looking at alternatives
• Could they work from home? If not, are they just unwilling to engage for another reason?
• It’s vital for firms to communicate and comply with governmentt guidance to reassure staff (at least to some extent). If someone doesn’t have a legitimate reason for not coming back and can’t work from home, this is more challenging! But businesses shouldn’t go down the ‘dismissal route’ straight away
• Is unpaid leave an option? Or an alternative role?
• The media are looking for examples of businesses behaving ‘badly’.

4. Can you furlough an employee working their notice period?

• Yes, you can
• There are some tricky rules about what you pay them during their notice period. If they’re entitled to statutory notice, they should be receiving full pay during this time. If their notice period is longer, the employer has more flexibility to pay them the 80% rate if they’ve been furloughed.

5. What support is there for staff from ‘at risk groups’ who are furloughed and vulnerable?

• We’ll need further clarity on what’s happening with JRS
• The question will come down to how the individual employer will handle this
• It’s important to bear the risk of disability discrimination in mind
• Make sure you’ve taken reasonable actions before looking at more dramatic options
• Engage with them, understand what they need, and see what you can make work.