In today’s press conference the Chief Minister announced a further set of support measures falling into three areas:
(1) Assistance paid to employers for the benefit of employees.
(2) General assistance to business.
(3) Protection of citizens
Assistance paid to employers for the benefit of employees.
HMGoG announced the creation of ‘BEAT’ or ‘Business and Employee Assistance Terms’, the aim of which is to help affected business sectors help their employees by way of HMGoG providing direct financial assistance. BEAT will apply to all sectors, save for those “excluded sectors” which are at this time: Gaming and Financial Services firms (including law firms), grocery stores, pharmacies and their suppliers. A list of excluded sectors will be published by HMGoG shortly.
The BEAT measures apply to anybody who is a registered employee of a Gibraltar business regardless of the nationality or residency of the employee. These measures apply to those employees who are employed:
The measures will see the creation of a new status in law: the "inactive" employee.
To access this financial assistance, which will be initially available for the month of April, and potentially further months going forward, the business or self-employed individual needs to complete, at the earliest opportunity, the appropriate online form and by providing the information requested. The forms will be made available online (https://www.gibraltar.gov.gi/), with announcements to follow via HMGoG’s social media platforms.
Any terminations of employment registered by companies from 15 March 2020 onwards will be regarded as invalid unless the Director of Employment has authorised the termination.
BEAT will provide for HMGoG to make the initial payment for the benefit of all inactive employees in the last week of April, and monthly thereafter until the measures are reviewed. Businesses are expected to meet salaries for the month of March.
Payments will be made directly from HMGoG to employers (including the self-employed inactive workers, who will be paid directly). Employers must pass the full amount on to those individual inactive employees without any deductions. The amount of the payment, certainly for April, is £1,155.00, which is a net amount (i.e. tax free) for a full time employee who ordinarily works 7.5 hours per day or more. The payment will be adjusted for part-time employees and those on zero hours contracts dependent upon the average hours worked in the period from 1 January 2020 to 15 March 2020, where a pro rated amount will be paid at the end of April to all relevant employers.
Employers and employees are expected not to abuse the measures and to report where an inactive employee status changes.
Business will be granted access to business premises for the purpose of locating relevant information to enable claims to be made and to run payrolls etc.
General assistance to business
Measures announced last week in relation to the previously “affected businesses” in the hospitality, leisure, distributive and catering sectors now apply to all sectors, except for those “excluded sectors” as published by HMGoG. Businesses will only be able to claim this direct financial assistance for those employees who are registered as ‘inactive’ due to a downturn in business. The assistance is not available for employees who are able to work from home. In relation to the self-employed, inactive means those whose income has been affected by the lockdown measures and who are confined to their homes and unable to work remotely.
The Chief Minister reminded the public of the measures announced last week in relation to affected businesses, which are now extended to all sectors. You can refer to ISOLAS summary of these measures here.
In addition, some adjustments and further measures were announced:
Protection of citizens
The costs of the measures, which were noted by the Chief Minister as a “shield around our working people”, are expected to be in the region of £10 to £30 million and HMGoG will consider borrowing capital at 40% of GDP ratio to provide up to half a billion if need be, but wishes to avoid this where possible. It is therefore important for persons not to abuse the measures and HMGoG will seek to prosecute those that do to the full extent of the law.
A special COVID-19 fund is being allocated in order that HMGoG can assess the cost of the crisis and how Gibraltar is going to pay for it.
Talks with the UK in respect of any assistance they can provide are ongoing, with sovereign borrowing preferential rates available to the UK that would otherwise not be available to Gibraltar, as well as the possibility of the UK acting as guarantor for Gibraltar on its sovereign borrowing commitments being explored.