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Brief Notes on HMGoG Press conference relating to new measures for 'Inactive Employees'

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

Tags

covid-19, gibraltar