In response to Covid-19, the government’s furlough scheme was introduced as a way of relieving the financial stress on businesses that, without this support, would have had to look at making significant redundancies. The scheme itself is due to cost over £54bn by October 2020. However, what we have seen mostly recently is that companies are in fact repaying their furlough grants, with companies such as Ikea, Bunzl and The Spectator all opting to do so. Why? Because businesses continue to face extreme scrutiny over transparency and companies’ motives have been called into question when claiming furlough for low-paid employees.
This comes as there are calls for more corporate transparency, which were brought to the forefront by the recent Black Lives Matter protests and the government’s bid to make companies publish work place risk assessments. Businesses as a result have faced increased reputation pressure to act morally and legally.
As a result of this, many employers are left faced with the question of how they can ensure that they are adequately balancing reputational issues and moral pressure with their legal obligations. As pressure increases on companies to do the right thing, some businesses who were entitled to claim furlough under the scheme, simply could not afford to repay the grant. This is because it was evidently vital for them to continue when they might otherwise had to close. This therefore has called into question for many, what is socially acceptable versus what falls within law. What we may see is some businesses looking at other ways to demonstrate their ethical practices and corporate transparency. Written By Sungjin Park.
Corporate transparency in particular has been urged in recent weeks, following the Black Lives Matter protests, with many businesses seeking to demonstrating diversity ad inclusion As businesses look to conduct surveys and diversity audits, this leaves them open to potential data protection issues. If conducting such surveys and audits, they need to ensure that they are complying with the rules on collecting, publishing and processing of personal data under the General Data Protection Regulations and Data Protection Act 2018. They also need to ensure they take upmost care when it comes to the rules on protected characteristics, irrespective of their intentions are good.
Workplace risk assessments are also being urged by the government, with companies being asked to publish such assessments online. Of course, employee safety will be a top priority and businesses will need to reassure their employees and the public of this. Although health and safety is a legal duty, there is no duty to publish risk assessments. Whether companies do so will boil down to balancing social pressure and reputation. When drafting any external communications on this, they will need to ensure that the message is properly portrayed, for example, people will need to know that they are safe without needing to know the details of how assessments are conducted.
We may see these two areas combining to create a new area of health monitoring. As companies are keen to keep track of employee health, they could look to implement mechanisms such as track-and trace apps. The Information Commissioner’s Office (ICO) has stated that there may be a need to collect such information to protect workers but this will still fall under data protection laws. Companies will therefore need to make sure that any action taken is necessary and proportionate.
As the trend moves towards greater transparency, companies will be faced with a need to balance the protection of employees and reputational consequences. It is vital however that any steps taken do not conflict with existing strict laws