Jobs on the line in furlough dispute between Native and HMRC

George Sell George Sell Uploaded 04 June 2020

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UK: Aparthotel operator Native may be forced to lay off more than 60 staff at its Manchester property if a dispute with HMRC over furlough payments can not be resolved

Employees at Cultureplex - the ground floor bar, restaurant and mini cinema at the Native aparthotel on Ducie Street - have been told they may lose their jobs next week if the issue isn't resolved. Cultureplex was previously owned by Bistrotheque, but was taken over by the aparthotel's parent company Go Native Ltd in February.

According to a report in the Manchester Evening News (MEN) Go Native Ltd has been told it cannot claim government furlough payments for more than 60 employees in the Cultureplex team due to a technicality in payroll processing after the changeover.

Native has been paying the staff's wages until now, but CEO Guy Nixon says the company is now on a "financial knife edge" as a result of the Coronavirus crisis and that the company may have to make redundancies from June 8.

In an email to staff, Nixon said: "Whilst HMRC have refused to fund your furlough payments, we did not want you to be out of pocket and were hopeful that HMRC would see sense. Accordingly, we have funded the furlough pay up until now. But Native is also under massive financial strain due to the closure of all of our aparthotels except to the NHS. We just do not have the finances to be able to keep this going for much longer. If we do not receive a solution to this, from the 8 of June we will have to make the incredibly difficult decision to lay off a substantial number of you in the Cultureplex team, paying you the furlough value to that point, again fully funded by Native. We desperately want to avoid this but without help from HMRC, we can’t fund this ourselves any further. Each of you will receive an email with details of how this will affect you, the specifics of how this works but to be clear this will mean that the most we will be able to pay those of you that we cannot continue to retain on furlough, is £150 over the next three months. We appreciate this is terrible news when we all reasonably expected these costs to be covered by the Government furlough scheme."

Under current HMRC guidelines, an employee must have been on the claimant's PAYE system before March 19, 2020, to qualify for furlough payments.

Native took over Cultureplex in February and paid staff's wages for that month on March 10, 2020. However, the February payroll was processed using the old Bistrotheque system and PAYE coding.

Nixon said this was "a temporary measure whilst we worked to assimilate our systems".

He told the MEN: "We're beyond gutted that the furlough scheme is being denied to this fantastic group of hospitality professionals. They're an amazing team being denied an opportunity to keep their jobs on a pure technicality. It feels incredibly unfair. It's also put huge additional financial pressure on Native - we've funded all payments in the absence of HMRC stepping in as they should."

He has written to Manchester Central Labour MP Lucy Powell urging her to raise it with the Treasury.

Ruby Downs, people manager at Cultureplex, said: "There's no way we we are going to find another job, none of us are at any point because, come October when the furlough scheme stops, if everything hasn't started to go back to normal more places will have to lay off staff. It's just a very scary time."

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