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Delay in easing COVID-19 restrictions will be a setback for employers

15 June 2021
Joanne Frew, Head of Employment practice at legal business DWF, comments on the latest jobs market figures published by the ONS, which shows that the UK employment rate is estimated at 75.2% between February 2021 and April 2021, 0.2% higher than the previous quarter, whilst the unemployment rate is estimated at 4.7%, 0.3% lower than the previous quarter.

Joanne said, "The latest ONS figures suggest the employment market is showing signs of recovery. The figures reflect a period when the UK was subject to tight restrictions.  As restrictions have gradually been eased following the roadmap out of lockdown we can expect further improvements in the job market.  However, Boris Johnson's announcement last night that stage four easing of restrictions will be delayed until 19 July 2021 because of the rapid spread of the Delta variant, will be a huge setback for employers who were relying on the roadmap to recovery proceeding as originally planned. 

"Business leaders' pleas to extend the Coronavirus Job Retention Scheme beyond 30 September 2021 following the delay in ending restrictions have been rejected to date. From 1 July 2021 employers will be required to contribute towards the cost of furloughed employees' wages. Although the latest ONS figures report that redundancies have now returned to pre-pandemic levels, we can expect an increase in September when the furlough scheme comes to an end. 

"The delay to the easing of restrictions is undoubtedly a huge disappointment for many employers.  However, providing the vaccine programme continues with its success and the delay is limited to four weeks, the labour market should remain relatively stable in the short term. The true test will be in September when the government lifeline of furlough is withdrawn, with hopeful anticipation that the two month window of a restrictions free labour market will reduce the need for redundancies."  

DWF comments on Scotland's Labour Market Trends released today

Ann Frances Cooney, a partner at DWF leading the Scottish employment law practice, said: The estimated unemployment rate in Scotland was 4.2%, up 0.1% over the quarter.  Scotland's unemployment rate was below the UK rate of 4.7%.  The estimated employment rate in Scotland was 74.2%, down 0.1% over the quarter.  Scotland's employment rate was below the UK rate of 75.2%.  The figures represent a period when Scotland was subject to severe restrictions.  As the restrictions are gradually eased we anticipate further improvements in the job market.  We can expect localised differences in the job market in Scotland as different areas are subject to tighter restrictions depending on Covid levels.  

The latest figures reflect a relatively robust labour market.  The true test will be in September when the Coronavirus Job Retention Scheme (CJRS) is withdrawn.  Business leaders' pleas to extend the CJRS beyond 30 September 2021 have been rejected to date.  From 1 July 2021 employers will be required to contribute towards the cost of furloughed employees' wages.   The country watches with hopeful anticipation that the easing of restrictions will be sufficient to reduce the need for redundancies when the government support comes to an end.  

Employment Law Expert Responds to latest Labour Market Report for Northern Ireland

Employment Law expert, Andrew Lightburn, director at the Belfast office of DWF comments on the monthly Labour Market Report issued today by NISRA. He said: “The latest LRA report shows that Northern Ireland's unemployment rate decreased by 0.6% between February and April 2021, giving an unemployment rate of 3.1% compared to a UK rate of 4.7%"

“In May 2021 there was a monthly increase of 0.7% in the number of employees receiving pay through HMRC PAYE. There was also a monthly increase of 0.5% in the NI employment rate which shows the proportion of people aged 16-64 in work. This potentially shows that the job losses of the last 12 months could be starting to be clawed back as the effects of lifting the lockdown are felt. The employment rate has increased to 69.8% from its previous position of 69.1%. But these increases are not yet statistically significant.

"The Report also stated that businesses reported that employee jobs increased over the quarter to March 2021. The quarterly increase of 0.3% was the first seen since December 2019. This increase was driven by increases in the services and manufacturing industry sectors.

"The increase in employment figures are however offset by an increasing number of redundancies. Proposed redundancies were 150 in May and currently 360 in the month to date with 280 redundancies confirmed in May. This takes the annual total to 5,920, the highest since 2001.

“There is much positivity that can be taken from the latest figures, although the increased employment rates combined with increasing redundancies would suggest that some sectors are doing better than others. It is also likely that the re-opening of the hospitality sector and subsequent recruitment (and much publicised 'skills shortage') is having a positive effect on the figures."

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