UK transport minister, Kelly Tolhurst has said the Job Retention Scheme (JRS) was “not designed” to allow companies to put their workers on furlough, only to then serve them with a notice of redundancy.
The minister was quizzed by MPs in Parliament today during an aviation industry urgent question put forward by the chairman of the Transport Select Committee, Huw Merriman. A point of concern for members in attendance was the recent revelation, that as well as making more than 12,000 staff redundant, British Airways reportedly could fire and rehire some employees on different terms including forcing them to take pay cuts.
In his opening statement to the House, Merriman said: “This is a hugely challenging time for the aviation economy, job losses are inevitable but many of us are concerned that companies are using this pandemic as a justification to slash jobs and employment terms.
“[British Airways is] the only airline that is effectively sacking its entire 42,000-strong workforce and replacing it with 30,000 jobs on inferior terms…It is ethically outrageous that our national flag carrier is doing this at a time when the nation in at its weakest and when we expect the country to do its bit.”
In response, Tolhurst said the recent announcements about redundancies from companies such as British Airways, Virgin and easyJet would be “very distressing news for employees and their families.”
She added: “These are commercial decisions and they are decisions which I regret, particularly those companies benefitting from the JRS. The scheme was not designed for taxpayers to fund the wages of employees, only for those companies to put the same staff on notice of redundancy during the furlough period.”
The minister added that she hoped all organisations who are accepting money from the JRS, would “threat their employees with the social responsibility that you would expect them to have for the workers within their organisation.”
“I will be doing everything in my power in order to make sure that that this is understood by those organisations,” Tolhurst said.
Describing BA’s actions as a “breach of faith”, Jerome Mayhew, MP for Broadland asked the minister whether the company should “pay a price for its actions". Tolhurt simply replied: “Yes”.
In early May, while appearing in front of Transport Select Committee, Willie Walsh, the boss of British Airways’ parent company, IAG said the JRS was “significant”, but argued that the three months of payments would only account for less than 10 days of cash burn for the carrier.
“Anybody who believes we can sit back and wait for months because we are receipt of the job retention scheme, I'm afraid they misunderstand the scale of the challenge that we face,” Walsh said.
Meanwhile, the debate today also brought up the subject of slot allocation at major airports within the UK. The Government is currently legally prevented from intervening in this process, but the transport minister is keen to change this.
“We want airport landing and take off slots to be used as effectively as possible for UK consumers…I want to ensure the slot allocation process encourages competition and provides connectivity. This is something I will be looking at,” Tolhurst said.