With the furlough scheme (officially the Coronavirus Job Retention Scheme) set to finish on the 30th September 2021, it is hoped the post pandemic recovery will enable employers to bring their employees back to full time work. As the end of furlough approaches we know many employers will be making plans to make this happen wherever possible as their preferred choice, whether that’s continuing home working or working differently. Sadly, where certain industries have not fully recovered or will continue to struggle for some time, the options for employers are as follows:
Continue the government scheme and furlough staff but pay them out of their own pocket
Provided employees agree, another option would be to extend furlough without the government grant, however, this could still be an expensive option, since without the government grant, an employer would have to bear the full cost of furlough payments. This would be beneficial if the business wanted to retain staff for when things picked up again and normal services resumed, but cash flow issues may hinder this in an already struggling industry.
Think about short-term working
Short-time working means providing employees with less work (and less pay) for a period while retaining them as employees. You can only pursue this option if you have a clause in an employee’s contract of employment. This will explain that you can go ahead with this arrangement if you require to, which the employee will have agreed with on signing their contract. Another option is if you and your employee agree to change their contract, which of course needs confirming in writing.
Lay off employees for a temporary period
You can lay off an employee (ask them to stay at home or take unpaid leave) when you temporarily cannot give them paid work – as long as the employment contract allows this. Lay-offs are more temporary measures that can be implemented to try and help stabilise the business if there is still insufficient work, but an upturn is expected soon. There is no limit the how long employers can lay off employees but if employees are laid off or put on short-time working for four weeks in a row or six weeks over 13 weeks, employees are able to apply for redundancy and claim redundancy pay.
Make staff redundant as a last resort
If ultimately there are no other options other than to make employees redundant, employers must follow either a collective or individual meaningful consultation process to ensure they comply with the legislation to ensure they mitigate against potential tribunal claims. We know that tribunal claims for unfair dismissal as a result of redundancy and lack of meaningful consultation are expected to sky-rocket as the economy finds it’s natural equilibrium and some industries grow as others contract.
There will be a number of legal obligations for employers to consider when dealing with the end of the scheme including the correct amount of notice given to returning employees or another variation of contract if they move employees to short term working or lay off. Often we only think about employees and forget the pressure and stress that is caused to Business Owners – we know how difficult it can be to make the final decision to end someone’s employment.
If you and your business needs assistance as the end of furlough approaches, or help with any potential redundancy consultations, don’t lose sleep – we can help. Please contact us here.