The Coronavirus Job Retention Scheme, better known as the furlough scheme, has just come to an end, on 30 September 2021. The scheme was introduced in March 2020, to help pay the wages of employees and workers who could not work due to the coronavirus pandemic. The scheme initially paid 80% of a furloughed person’s wages and it has no doubt supported millions of businesses and protected countless jobs throughout this unprecedented time.
The furlough scheme has evolved in line with the lifting of Coronavirus restrictions and more businesses reopening. From July 2020, furloughed employees were able to work flexibly (flexi-furlough) and from July 2021, employers had to start paying towards their employees’ wages as the government’s contributions began tapering off.
Now employers will once again be paying all of their employees’ wages. So, what does this mean?
The economy is open again, there are a record number of job vacancies and the majority of the Covid restrictions are removed. For some employers, this means they will be able to welcome their staff back and pay their wages in full. However, for others, particularly those in the travel and hospitality industry, they may not have recovered sufficiently to be able to take all staff back from furlough; employee costs are often the highest business expense. If so, the end of furlough will mean uncertainty and some employers may have to consider making redundancies or find alternatives to redundancies.
Clear communication – talk to your staff
Faced with this situation, clear communication with staff is key, be open and honest about the financial difficulties as staff are then more likely to understand. Employers should consider alternatives to redundancies first. Redundancies are costly, time-consuming and once lost, talented and experienced employees can be difficult to replace. Staff morale can also be significantly adversely affected.
Alternatives to redundancy
Alternatives to redundancies and other ways to reduce staff costs include restricting recruitment, withdrawing job offers, reducing the number of agency, temporary and casual staff, laying-off staff and placing them on short-time working (where there is a contractual right to do so) and reducing hours of work, pay or benefits. However, any changes to employees’ terms of employment (temporary or permanent) will require the employees’ consent and going through a consultation process will help to explain to staff why it is necessary in order to obtain that consent.
The redundancy process – make it fair
After considering the alternatives, some employers may still have to make redundancies. If so, a fair and reasonable redundancy process should be followed in order to avoid unfair dismissal claims (for those with 2 or more years’ service). Mangers will therefore need to familiarise themselves with the process and their legal obligations, to plan in advance and ensure appropriate selection criteria is well thought out, documents are obtained, dates of meetings and availability are considered.
Raworths Employment team can assist you to ensure you get this process right as well as working through the alternatives to redundancy.
Published on 6 October 2021