Many businesses are bracing for a difficult winter after the government announced new Covid-19 restrictions © Henry Nicholls/Reuters

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Business and union leaders have called on employers to do everything possible to limit job losses as the UK faces up to a bleak winter of continued Covid-19 restrictions.

In a joint statement, the CBI business group, the Trades Union Congress and Acas, the conciliation service, on Thursday urged companies to “exhaust all possible alternatives” before making redundancies — and also, if they became inevitable, to treat workers fairly.

“We know we are doing absolutely everything we can to prevent [job cuts] but . . . they are already happening,” said Kate Bell, who leads TUC policy on employment. “This is a really important moment.”

The statement comes as chancellor Rishi Sunak prepares to unveil a new package of support for businesses to try and avert a surge in job losses in the next few months. Fears for some sectors of the UK economy have grown since Boris Johnson, UK prime minister, announced on Tuesday, tighter restrictions to try and control rapidly rising coronavirus infection rates.

Ms Bell said she hoped companies would avoid the “completely unacceptable” fire and re-hire tactics attempted by firms such as British Gas. She added they should be alert to the potential for discrimination when selecting workers for redundancy. If performance over the past six months was a criterion, she said, workers who had been furloughed or shielding potentially faced unequal treatment.

Some employers “are forgetting the rules that have been there for years”, said Susan Raftery, a senior adviser at Acas, the arbitration service, who has seen cases of companies firing workers by text message or WhatsApp at a day’s notice. Others, especially smaller businesses, simply lacked experience of the process, she added, saying: “We are talking to a lot of employers who have never done this before.”

Many of those who remain in work are likely to face a squeeze on pay over the next year. Some business groups have been calling for a real terms freeze in the minimum wage in 2021, arguing that they cannot afford to increase pay without cutting more jobs, while the TUC insists it would be “morally wrong” to penalise low-paid workers who have borne the brunt of the crisis.

The Resolution Foundation, a think-tank, argued in a report published on Thursday that ministers should be cautious in raising the minimum wage, even though low-paid workers have found themselves facing both the highest health risks and the biggest economic hit from the pandemic.

The government’s aim is to raise the statutory wage floor from 60 per cent of median earnings to two-thirds of median earnings by 2024. Going by the pre-pandemic trajectory of earnings, this would have meant an increase of around 50p in the current adult minimum rate of £8.72 per hour.

But the Resolution Foundation said that given slower earnings growth across the board, an uprating of around 15p would still be consistent with progress towards the 2024 target.

This would be the smallest increase in almost a decade, but the think-tank said there were good reasons for the Low Pay Commission to take a cautious approach when it made its recommendation to government next month on how far the minimum rate should rise next April — and that other policies, such as more generous benefits payments, would be more effective in supporting low income households hit by the pandemic.

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