Credible intelligence, received from a source employed at Keoghs, reached our news desk yesterday evening that Keoghs are set to make an announcement to their staff this morning announcing that as many as 250 employees will be furloughed today (10th June). It was suggested that the majority of those furloughed will comprise junior administrative employees. At this stage, the intelligence has not been confirmed.
Many CHOs and body repairers have taken advantage of the Coronavirus job retention scheme during the current epidemic as business volumes have been difficult to sustain during a period of reduced road usage and fewer accidents.
The Coronavirus job retention scheme, under which employees can currently receive a grant of 80% of a furloughed employees salary up to a maximum of £2,500 per month, closes to new entrants on 30th June. From this point onwards, employers will only be able to furlough employees that they have furloughed for a full 3 week period prior to 30 June. This means that the final date by which an employer needs to agree with their employee and ensure they place them on furlough is today (10th June).
If correct, the news of Keoghs decision to use the scheme comes at a time when an increasing number of CHOs are resorting to litigation. Some insurers have used the Coronavirus epidemic to slow down settlements and the constipation in the civil justice system is slowing the appetite of insurers to make settlement offers ahead of trial. Ironically, those solicitors that represent insurers in defending credit hire claims are often reimbursed only when a claim settles which makes the current Coronavirus related delays painful for entities on both sides of the credit hire supply cycle.
An update will be provided when and if further information is available.
Update (1150 10/06/2020) One member has commented that Keoghs have lost a lot of FNOL business during the lockdown and that may be a factor in any furlough decision. This is a valid comment to make albeit that traffic volumes, repair instructions and accidents do seem to be normalising to pre lockdown volumes and any furlough decision today requires employees to not work for at least the next three weeks.
Update (1515 10/06/2020) We now have clarification of the announcement made by Keoghs and the implications on their operational infrastructure. We will provide a further Flash update tomorrow morning.