Car Dealer Live

Car Dealer Live 11: Lawgistics’ Nona Bowkis and ASE Global’s Mike Jones on commission and furloughed staff

Time 1:46 pm, April 7, 2020

As we now have further clarification on how furloughed sales staff’s commission can be paid using the government support, Lawgistics legal adviser Nona Bowkis and ASE Global chairman Mike Jones appeared on Car Dealer Live today (Apr 8) to explain the guidance in more detail. 

Bowkis clarified that the new guidance confirms employees can ‘either get 80 per cent of their salary or whatever they were paid last year, whichever is higher’ and that ‘if a car dealer’s wages are usually made up of a basic plus commission then you can pay an average amount.’

The information from HMRC so far has caused confusion for many businesses and employers have continued to deny commission pay for sales staff, even after the guidance was updated. 

Jones had two main warnings for businesses: pay your staff now and talk to your bank urgently about how they can help if the furlough money doesn’t arrive in time to pay staff. 

‘I can understand the caution from some dealers, because ultimately they have to put the calculation together, they have to claim the money and ultimately they’re going to be audited by HMRC,’ he said. 

‘They’re going to need the staff back fast though. There’s a lot of new cars that need to be delivered, used cars are still selling, and we’re going to need salespeople to do that. If we’ve got a disaffected sales staff from being on minimum wage, I think that could be quite dangerous.’

He continued: ‘I very much see a challenge on the timely payments for the April payroll. I think all the retailers need to be talking to their banks and planning for the fact they won’t have the cash in time. We need to be planning for that now.’

Another pressing question from viewers of today’s show regarded the guidance for re-employing a staff member who had recently left or been made redundant. 

‘If you made someone redundant, you should consider taking them back. If you said there wasn’t enough money to pay them and then you could have furloughed them, there may be employment tribunals down the line,’ said Bowkis. ‘But if these people have left and started a new job, we’re still saying don’t take them back.

‘It would be nice, but let’s say this lockdown goes on for six months, you re-recruit somebody, at the end of this you’re going to have to pay someone accrued holiday and possibly their notice period again if you’re taking people back on.’ She added that it may sound ‘quite harsh’ but businesses had to ensure that they were still running once this was all over.

‘I think employers are putting themselves in a sticky situation if they start taking people back on.’

Presenter James Baggott noted that some car dealers had been keeping staff working while furloughed and asked his guests for their opinions. 

‘They’re taking a big risk if they’re doing that, particularly if people are still active on social media,’ Jones said. ‘I think it’s a very dangerous path to tread.’ 

Bowkis added: ‘HMRC are paying out a lot of money, so if people are making fraudulent claims – just don’t do it. 

‘To be eligible for the grant, employers must confirm in writing that their staff have been furloughed. That’s the sort of evidence they’re going to be looking for. They need to make sure they have that in writing for all their employees and they’ve said it needs to be kept for five years. That suggests they’ll be investigating this for the next five years.’

To watch the interview in full, you can see it above, and if you subscribe to our YouTube channel you’ll get a notification when we next go live.

You can watch all of our Car Dealer Live interviews by clicking here.

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Car Dealer has been covering the motor trade since 2008 as both a print and digital publication. In 2020 the title went fully digital and now provides daily motoring updates on this website for the car industry. A digital magazine is published once a month.

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