The lasting effects of a pandemic from an Employment law perspective

The pandemic has had a seismic impact on nearly all aspects of life. In particular, it has taken a massive toll on employment and the workplace as we once knew it.

The disruption caused by Covid-19 has meant many businesses have been unable to operate in their usual way, if at all. The catastrophic impact of this can be measured by an increase in both unemployment and redundancies, with the latter at its highest level since records began in 1995.

Covid-19 and unemployment inequalities

Significantly, workers from certain demographics have been disproportionately impacted by the coronavirus outbreak. Ethnic minority groups, women, the young, low paid and disabled workers have been most negatively economically affected.

For example, 15% of workers in sectors which have had to shut down, such as hospitality, are from a minority ethnic background, compared to 12% of all workers. 57% of hospitality workers are women, compared to a workforce average of 48%, and nearly 50% are under 35 years old.

Low paid workers are also more likely to work in impacted sectors and are less likely to be able to work from home. Statistics also reveal that BAME millennials are 47% more likely to be on a zero hours contract than their white counterparts.

These existing economic disparities could lead to long lasting and devastating effects.

It is also evident that women are more vulnerable to Covid-19 related economic effects because of existing gender inequalities.

Women’s jobs are 1.8 times more vulnerable to the crisis than men’s jobs. Women make up 39% of global employment but account for 54% of overall job losses during the pandemic. One reason for this greater effect on women is that the virus is significantly increasing the burden of unpaid care, which is disproportionately carried out by women.

Organisations play a crucial role in being aware of these disparities and the negative impacts that may result. The McGregor-Smith Review into Race in the workplace found that tackling the racial disparities in the UK labour market could result in an annual economic boost worth £24bn to the UK Economy.

Likewise, policymakers have a duty to not only help the most disadvantaged demographics to access employment, but also to promote job quality, retention and progression within employment practice. If employers and policy makers take action now against gender inequality in the workplace, the McKinsey Global Institute estimates by 2030 it could lead to the creation of 230 million new jobs for women globally.

The future: post-Furlough

The Government’s Furlough scheme has provided a lifeline for employers and employees. Between August and November 2020, around nine million people were being paid 80% of their income through the scheme.

This support has been extended to the end of April 2021. After that, employers will need to decide if they can retain their entire workforce or not.

It is unlikely the economy and businesses will have sufficiently recovered enough for all furloughed workers to return to a job. Additionally, throughout the pandemic consumers’ spending habits have changed, potentially for the long term, with more customers than ever becoming comfortable and competent with online ordering. Also, businesses are unable to work at efficient capacity if social distancing guidelines remain in place.

Therefore, further redundancies are expected to be made when the scheme comes to an end. Two in five organisations with staff on furlough say they will have to make some or all of their furloughed staff redundant when the scheme comes to an end. The true effects of Covid-19 on employment remain to be seen.

The workplace and employee wellbeing

Despite the above, the impact on the mental health of employees has not been as closely examined as the risks to physical health associated with Covid-19. Yet, it is widely reported that mental health charities have seen a surge in demand during the pandemic; job insecurity and financial worries are cited as primary causes for concern.

Long-term remote working may also have negative effects on training employees and particularly on training new and/or inexperienced members of staff who cannot so readily observe, ask, learn and be taught, which may impact on career development.

Business leaders must be alive to the reality of a significant crash in workforce productivity and happiness, as stress levels and fear of the unknown rises.

The Flexible Future of Work report found 30% of employees felt lonely while working from home and 26% missed informally socialising with colleagues. These findings highlight the challenges facing companies with a dispersed workforce.

The pandemic-induced working from home culture has altered perspectives on work, flexibility and the office.

From an employee perspective, the shift in remote and flexible working is very consequential. People are making new choices about where they want to live and creating new expectations about flexibility, working conditions and life balance that can’t be undone. Studies suggest the majority of workers never want to return to the old way of working. Only 12% of workers want to return to full-time office work, whilst 72% want a hybrid remote-office model moving forward.

There will be long lasting effects on employment and the workplace as a whole, even after we emerge from lockdown 3.0, and the true impact of Covid-19 may not be seen for years to come.

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