Please find below a very rough and contemporaneous note of key points emerging from the announcement of the 'inactive employee' measures communicated by HM Government of Gibraltar this afternoon.
Full guidance on these measures and what this means for businesses will be available to relevant sectors in due course, please contact Hassans for any urgent advice needed.
Hon Fabian Picardo QC, MP stated:
Restrictions on movement are now in force
Many businesses are now closed due to the public health emergency that is in progress.
Gibraltar has a total workforce of 34,973 with 5 -10k in the excluded sectors - there are many active employees so we should see a significantly reduced number of 'inactive employees' being claimed for
CM states: 'No choice but to do this'
Passed emergency budget on Friday, purpose of the measures was twofold:
1. to enable HM GoG to continue to function and spend
2. to prepare us to assist businesses and employees
Already announced some measures to assist business
Now expanding the measures to all areas of business except those excluded sectors
Acting to protect employees
Today’s measures protect our economy and our people
Market economy broken; a dearth of demand for retail and services
Have had to stop activity in other sectors
These measures are designed to favour everyone
Three types of measures
1. Employees - self employed affected
2. Employers - the entrepreneurs
3. All citizens
Complex measures
A series of guidance and guidelines to be published
Working on translating employee specific guidelines
Working closely with the CELAC
Business and Employee Assistance Terms (BEAT) Covid measures
Provide no more and no less than will be needed
Agreed measures with the Opposition for a three month period
We have created these in the 96 hours since the emergency budget to help businesses
To enable them to help employees
Also applies to self-employed
Employees are the lifeblood
We’re creating a new status in law - ‘inactive employee’
Businesses that can’t afford to pay their employees who are unable to work will receive direct financial support to retain staff and pay salaries
We expect businesses to retain employees
All businesses can apply for employees deemed inactive to be paid for by Government
No employer will be able to justify massive layoffs
Measure applies to full time, part time and self employed employees
Including zero hours contracts
To be targeted exclusively at those who will need it
No abuse tolerated
Internal checks incorporated designed to severely punish abuse
Online form will be made available
Businesses will receive a monthly payment for each employee, the business then pays employees
Businesses are not entitled to retain or deduct any amount
Self-employed persons can also apply, they will receive payments direct
To preserve rights, terminations from 15 March 2020 will not be allowed without specific permits, which will only be issued in very limited circumstances
Employees at the start of this crisis are not disenfranchised
An individual needs to be registered as an 'inactive employee'
An 'inactive employee' is one that has been sent home because of a downturn suffered by the business
These would have otherwise been sent away or laid off
Time is of the essence
We want for businesses to be able to continue with reduced employees
HM GoG is delivering on measures and details
The measures are for real people who need income
First payments by the end of April 2020
We will continue these payments in May and June if necessary
How do you access?
The measures are not designed for the employee to apply direct, it must be the employer or the self employed person
Forms that need completing will be available online
Employers subject to closure will be able to access their premises in order to be able to complete the form
HM GoG will need full details along with with account details - name, position, tax ref number, individual employee’s contact details for each employee,
Info on whether each 'inactive employee' is full or part time
A full time employee will be be 7.5hrs per day or more
If part time, employer to provide average of hours worked per day
Also true for those on zero hours contracts
PAYE and social insurance returns will be cross-checked
No employer will be allowed to cheat
Serious criminal penalties being sought for any abuse
Final section of form has serious declarations, giving rise to these penalties
How will these measures work?
Employers will receive the per-employee amount
£1,155 for full-time or self-employed person each month
And a fraction thereof for those who work less than full time
Tax free
Whatever the cumulative income may be
No PAYE or social insurance deduction
We will legislate that social insurance records will be deemed paid in April even if waived
Passed on to the employee without deduction
Failure to do this will result in criminal prosecution
BEAT Covid rate is based on min. wage of £7 per hour, 7.5 hours a day for 22 days.
Lenders are already prepared mortgage payments
Employer must notify if an employee stops being inactive
Payment will be made towards end of the month of each month of the Covid period
CM highlights: ‘We must share the pain of the economy’
The month of March must be paid by employer
Employers can continue to work on the guarantee that they will have the payment from HM GoG in their accounts by the end of April
These businesses can also turn to local banks, who can assist with bridging finance.
Forms to be completed as soon as possible
Why so many contact details required?
So we can check information provided on a sample basis
Letting employees know when the payment is made to the employer
Employees to advise HM GoG of non-payment by the employer
Other assistance for business
All measures apply to all business sectors affected unless specifically excluded
Underlying principle - interplay between economy and its business
We have to have an economy to come back to when Covid-19 pandemic subsides
Covid pandemic will subside
These measures are in addition to the ones already announced on 20th March
A timetable is being made available re whether the measure is up for review and when. This is continually reviewed.
Updated lists and guidance will be issued as necessary
There is a waiver of commercial rents for second quarter where HM GoG is the landlord
Encouragement of commercial rent waivers for private landlords - rent waiver and extension
Business rates waived for Q2 for all businesses
Deferral of utility bills for businesses in non-excluded sectors for April can be paid over 12 months - to be reviewed if extension is required
Payment of salaries will not attract PAYE for month of April
The law will change to permit the employers to retain this element of salary
All sector employers will be allowed to defer Q2 contributions for 12 weeks
Stock repurchase for perishable stock measure still in force
Import duty waiver until 30 April - as a rebate in respect of motor trade - to be reviewed
Registration process and waiver of all fees for all sectors
FSC fees paid quarterly in arrears
Gaming duty deferred to end of each quarter
Encouragement to rent waiver is limited to three months, Q2
We need to see if we can assist affected landlords if pandemic extends past Q2
Specialist teams set up to advise on changes to insolvency litigation and other issues
Corporation tax deductible of £50k as a one off capital allowance
Sports related segment of online gambling - wholly reliant on sporting events, will be kept under close review
Financial services and gaming will be excluded from the first wave of these measures by agreement with representatives from those sectors
Further measures to protect all citizens
Price control measures - OFT has received reports of profiteering on essentials - price controls will mean that these businesses will not be able to sell at more than 10% markup of previous sale price
Where justifiable cause is available, margin can be up to 20%
Fine of up to £5k for any person that is foul of these price control measures
No video recording within medical facilities in Gibraltar
Patient privacy must be respected at all times
Additionally, measures to ensure no evictions can be sought in law, where tenant cannot pay rent
Relief for buyers of new affordable housing scheme properties with monthly payments for those in genuine difficulties. They should contact the GRP.
Asking all management companies not to take action on failure to pay service charges during Q2
If you can, please pay your service charges
Do not claim for an 'inactive employee' if they are active
Do not pretend to be inactive if you can work
If you can pay without our help, please pay
If you can pay your rent, please do so
If you can pay your mortgage, please do so
We are putting in place a shield around working people
Prudent about what coming months and years may hold
We have no clarity about what may lurk in the days and weeks to come
Remember the very difficult job we are asking our police officers to do
We’re doing this because of lives that may be lost if we don’t
We are all in this together - we have no clarity about what may lurk in the days and weeks to come and now must be a time of communal solidarity... We're doing this because of lives that may be lost if we don't
www.gibraltar.gov.gi/...