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End of furlough: key considerations

Since the introduction of the Coronavirus Job Retention Scheme (CJRS) at the onset of the pandemic, the wages of over 11.5 million workers have been supported by the scheme. The scheme has been extended numerous times but is due to end today, with final claims for furlough payments being required to be made by 14 October 2021.

The Trade Union Congress has called for the extension of the CJRS and the introduction of a permanent short time working scheme, however, as it stands, there are currently no new government support measurements planned and there is no suggestion that the Job Support Scheme will be re-introduced either.

Data from the Office of National Statistics suggests that 6% of the UK workforce remains on full or partial furlough, with airlines remaining one of the biggest benefactors of the furlough scheme. While the hope is that employers will be in a position to welcome back staff back to their previous roles, unfortunately some organisations may not have financially recovered enough to be able to do so. Therefore, employers will need to carefully consider the ongoing viability of their business, the number of staff they need and what cost savings they will need to make in order to give themselves the best chance of long-term survival.

Bringing employees back to work on their pre-furlough terms and conditions

In the ideal situation that an employer is able to allow staff to return to their previous role, it is advisable that the employer should consult with employees about their return and consider how best to integrate them back into the workplace. Employees may be anxious about a return after such a long period, and it is therefore advisable to have a meeting with the affected employees to discuss the situation and to encourage them to raise any concerns or problems linked to their return.

It would be sensible to discuss the following:

  • The measures put in place to mitigate the risk of COVID-19.
  • The arrangements for their return to work. Would a phased return be helpful?
  • Flexible working arrangements. It may be that a hybrid working scheme has been implemented and therefore this is a good opportunity to update the employee.
  • Any new rules in place.
  • Any reasonable adjustments that may need to be made for disabled employees.

Potential Redundancies

The aim of the CJRS was to keep employees in employment, but with the CJRS coming to an end, redundancies may have to be considered. A survey of 250 firms by the British Chamber of Commerce (BCC) has revealed that one in five plans to make redundancies as the furlough scheme winds down.

Employers should take into consideration that redundancies can be costly. Employees who have been continually employed for two years or more will be entitled to a statutory redundancy payment based on their age, length of service and weekly pay.

Therefore, an employer should consider alternatives to redundancy in the first instance.

Possible alternatives to redundancy

Before redundancies are made, an employer should consider any possible alternatives such as:

  • Redeploying staff
  • Career break/Sabbaticals
  • Unpaid or part-paid leave
  • Lay off or short time working
  • Overtime bans
  • Hiring freezes
  • Delaying wage increases
  • Short time working and lay offs
  • Pay cuts
  • Ending expensive office leases
  • Introducing flexible working

 

An employer would need to ensure that in putting in place alternatives, it does not breach an employee’s contract of employment. An employer would also need to bear in mind that any change to terms and conditions requires employee agreement and will need period of consultation.

Redundancies

If compulsory redundancies are necessary, any redundancy must be genuine and fair, with due process followed.

Employers need to consider how many redundancies are likely as this affects the consultation period. For 20-99 employees, collective consultation needs to happen 30 days before the first dismissal and for over 100 employees, it is 45 days.

For employers making up to 19 redundancies, there are no rules about how they should carry out the consultation, only it must be done within a ‘reasonable time’. A fair process is still essential, and an employer should listen to any suggestions from employees for avoiding redundancies.

If you have any questions regarding the end of the Coronavirus Job Retention Scheme, please do not hesitate to contact our Employment team for more information. 

Furlough end of the road
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