How are people going to put their jobs on hold, possibly for several months, as the coronavirus epidemic will apparently require?
Working from home gets a lot of media attention, perhaps because this an option for journalists. In practice, only a fraction of the wider workforce has a job they can do at home and an employer who will let them.
The government has focused its efforts on statutory sick pay. Emergency legislation will require employers to pay this immediately to the sick and self-isolated, without a doctor’s note. Most people on part-time and zero hours contracts will also qualify. Those who do not, including the self-employed, will have access to sickness benefits.
However, this is only useful if you are sick, expected to apply to one-fifth of the workforce at the peak of the epidemic.
Belfast City Airport provides a timely warning of what the remainder of the workforce is facing.
Around 150 people employed by air services firm Swissport have been told they could be laid off for two weeks without pay while the airport replaces business lost due to the collapse of Flybe.
It is easy to foresee this being a common response to coronavirus, certainly across the private sector. Trade unions are appalled that Swissport, a huge multinational company, is expecting its Belfast staff to carry the can for what amounts to a local difficulty. But coronavirus is a global problem and firms across Northern Ireland, large and small, may genuinely feel they have no choice but to send staff home while the economy splutters to a halt.
In many respects, this is the worst possible position to put an employee in.
A person who is temporarily laid off is neither unemployed nor redundant. If they quit their job voluntarily, they become ineligible for benefits for 26 weeks. If they ask to be laid off permanently, the employer can refuse if they believe future work will become available. The employer is motivated to do this as it avoids liability for a redundancy payment. That motivation only increases if the business is at risk of failure. So the laid off worker is in limbo and also in a trap, waiting to be left with nothing.
The final insult is the maximum employers must pay under these circumstances. Known as ‘guarantee pay’, it is fixed at £29 per day, capped at five days in any three month period - as long as the peak of the epidemic could last, during which temporarily laid off workers would be entitled to a grand total of £145.
Benefit rules and levels are not devolved to Northern Ireland but employment law is, so Stormont can fix the lay off trap. Every aspect of short term lay offs is under the control of the executive and the assembly, via a law they have frequently amended in the past. At the very least, Stormont could raise guarantee pay to match statutory sick pay. Westminster is rushing through far more complicated legislation in days, as is the Dail.
Requiring staff to be paid will only be effective if employers have the money to do so.
This is another area where Stormont can make all the difference.
Local and regional business rates are a significant burden on most employers in Northern Ireland. It is fully within the remit of the Department of Finance to suspend collection of these payments during the epidemic, or make payment optional, then spread the balance over subsequent months.
The executive has enough borrowing powers to cover its own shortfall during this period. Alternatively, it could ask London for a bridging loan. Interest on Treasury debt fell below zero for the first time in history this week, meaning the government now gets paid to borrow money.
Public spending accounts for two thirds of Northern Ireland’s economy. Normally considered appalling, this is a cushion for the whole economy in a crisis. If Stormont commits to maintaining payments to all the companies and contractors it does business with, regardless of how their businesses might stumble over the next few months, a great deal of damage can be avoided.
A break from work may still be necessary for many parents as lengthy school closures seem inevitable. If people need to work fewer hours and their employers need fewer workers, you would hope even Northern Ireland’s bosses and managers could figure something out.
We will know soon enough.
