"The latest figures for June 2020 show that the number of employees in the UK on payrolls is down by around 650,000 compared with March 2020. This fall is unsurprising as the economic impact of COVID-19 takes hold. The latest reports from the Office for National Statistics shows that the largest falls were seen at the start of the pandemic and that while the number of payroll employees is still falling, the decline is slowing. Inevitably Government assistance in the form of the Coronavirus Job Retention Scheme ("CJRS") will have helped limit the full damage of the pandemic on employment figures. When the CJRS closes on 31 October 2020 it is expected that unemployment figures will rise sharply. There may also be a rise in redundancies leading up to 31 October as the amount an employer is required to contribute in respect of furloughed workers gradually increases. Between March to May 2019 and March to May 2020, total actual weekly hours worked in the UK decreased by 175.3 million, or 16.7%, to 877.1 million hours. This is perhaps a better reflection of the impact of the pandemic, without the CJRS masking the figures.
"Many employers will be watching with anticipation what impact the Chancellor's latest round of support will have on getting the economy back on track, from the Job Retention Bonus for employers who bring employees back from furlough to reducing VAT in the hospitality and tourism sectors from 20% to 5% until January 2021. If the economic stimulus has the desired effect it may be that the impact on employment will not be as severe as predicted. However, many employers do not have the luxury of time and are having to make difficult decisions now in order to remain economically viable.
"The latest figures show that employment is weakening and unemployment is largely unchanged, but there are some signs of economic inactivity, with people out of work not currently looking for work. One possible cause of this could be those with caring responsibilities such as childcare or caring for vulnerable relatives may not actively be seeking employment."