Treasury’s Job Bonus Scheme: Primark, John Lewis, and William Hill do not wish to use it


  • Primark had furloughed around 30,000 employees in Britain in March 2020, but had removed them from the scheme during June 2020
  • John Lewis is planning to permanently close 8 out of its 50 stores
  • William Hill is merging its retail and online businesses
  • There are concerns around the Job Retention Bonus Scheme and it may not be a sufficient carrot to make firm retain talent, during a very low demand pandemic scenario
  • Even more job losses on cards across the nation

Three prominent UK firms - Primark, John Lewis, and William Hill have declined to make any use of the Chancellor Rishi Sunak’s recently announced job bonus scheme.

The UK Treasury had come out with a mini budget on 9 July 2020, and the Job Retention Bonus Scheme was a part of it. The scheme promised providing a bonus of £1000 for each furloughed employee, that joins back work, to retain back employees even after the furlough scheme expires in October 2020. The job bonus scheme will be paying the monthly bonus beginning February 2021.

Also read: Sunak Announces Mini Budget 2020; Special Focus Given To Employment Generation

Primark said that it will not require the British government’s job bonus scheme, for its staff that it had earlier put under furlough. This implied that the company is ready to forego a bonus handout of around £30 million, for its staff.

Primark is a fast fashion retail company with its head office in Dublin. It is a subsidiary of British retail and food processing giant named ABF (Associated British Foods). It sells with the brand name of Penneys in Ireland and has stores all across the Europe, including Britain. Due to its store closures across the world beginning last week of March 2020, Primark lost monthly sales of roughly £650 million.

The retail company had shut down most of its stores in the UK after the lockdown was imposed on 23 March 2020. On 15 June 2020, it re-opened 182 stores across Britain.

In the United Kingdom, the company had furloughed close to 30,000 employees. It re-opened its stores during the month of June and removed its staff from the furlough scheme at the same time. So, it does not need to take advantage of the job bonus scheme presently, clarified a company spokesperson.

Apart from retail, other division of ABF are grocery, sugar, agriculture and ingredients. The company stock (LON:ABF) traded at GBX 1,934.50 on the London Stock Exchange (LSE), down by 0.54 per cent on 13 July 2020 at 9.44 am. Its 52-week low/high range was 1,607.50 / 2,708.00.

John Lewis is the Great Britain’s department store chain, selling high-end fashion, furniture and, homeware goods. The company had made use of the government furlough scheme earlier and put 14,000 of its workers under it. However, now the chain feels that it may not need to take recourse to the job bonus handouts.

It is noteworthy that John Lewis is planning to permanently close 8 out of its 50 stores and this would translate into a job loss for 1300 out of its total staff.

William Hill plc (LON:WMH), is a famous bookmaker company based out of London, and is part of the FTSE 250 Index. The gambling company is also likely to reject the bonus handouts proposed by the UK Treasury. The company has also said that it will not be utilising the job bonus scheme.

On 3 July 2020, it announced a restructuring plan to fight the corona pandemic, by merging its retail and online businesses. The company stock was trading at GBX 113.80, up by 0.09 per cent on 13 July 2020 at 9.57 AM. Its 52-week low/high range was recorded at 36.70 / 205.20.

Concerns around the Job Retention Bonus Scheme

There are some concerns around the way the Job Retention Bonus Scheme has been shaped. One of the necessary conditions for any firm to access the scheme is that it needs to retain all of its staff (which was under furlough) on its payrolls, till the end of January 2021.

With the furlough scheme ending in October 2020, and businesses facing severe cash crunch, it will be a real challenge to be able to keep paying salaries to this group of workers, mentioned Dame Carolyn Fairbairn, Director General at the Confederation of British Industry (CBI). Almost 75 per cent of companies are still reporting a lack of demand and will need more direct support measures on an urgent basis, she added.

To be able to take advantage of the government furlough scheme, firms have to meet certain conditions. The scheme pays for full salary of employees that it covers, only till July 2020. In August, firms need to pay for 5 per cent of the wage bill, which has to be raised to 14 per cent in September and further to 20 per cent in October this year. Frances O'Grady, General Secretary, the Trades Union Congress felt that not all firms will be able to pay for even this marginal part of the total wage bill, given the tough market conditions they are confronted with.

National Institute of Economic and Social Research (NIESR), the leading thinktank in the UK has similar views. The body lamented that a £1,000 job bonus might not be enough to attract employers for retaining their workforce talent with them. It also opined that the government could have waited for some more time before coming out with the bonus scheme, at least till October, when the furlough scheme ends.

Sunak has responded by saying that the autumn budget will have more incentives coming up, and will also present a spending review of the support measures announced till now, to help the economy fight with the coronavirus pandemic.

More job losses on cards

Despite all the government efforts, there is more news coming in from various sectors about job losses on cards, with each passing day.

Event management companies are looking at laying off close to 30,000 workers, due to the uncertainty related to resumption of trade fairs and events in Britain. The UK Event Industry Alliance has called up the government to quickly announce a date of re-opening for the exhibitions sector.

General Electric, which manufactures jet engines for aviation companies, has decided to cut 369 jobs at its Nantgarw based plant.

The Airports Operators Association of the UK has already warned the government that 20,000 job slashes are on the cards by the aviation industry, unless the British government offers direct support in the form of business rate waivers.

Arup construction company has also announced 350 job redundancies, to re-structure its business and better navigate the Covid-19 crisis.

Finally, while the government’s intention has been good - to provide job bonuses to firms for retaining jobs - but it may not be sufficient. John Lewis, Primark, and William Hill have said that they will not be utilising the Treasury’s bonus scheme. Most of the UK based companies are undergoing severe cash-crunch and demand is at a very low level. Government may have to soon announce additional sector-specific rates cuts and direct support measures, to prevent mass unemployment in Britain.