How have businesses dealt with furlough ending?

Since March 2020 businesses have had the ability to work under the coronavirus job retention scheme utilising furlough for employees for periods of time where no work was available. The government paid a proportion of the employees’ salary to enable businesses to avoid lay off, redundancy, restructure, or closure.

Business owners who have been using this coronavirus job retention scheme will have been considering for the last few months what to do with their furloughed staff and if they are able to return to work or figure out what route they need to take as a business to move forward.  A difficult decision to make as it can have a great bearing on a business’s financial health and overall success.

It has been identified via the HR1 forms (forms employers complete to notify the government of potential redundancies) that in 2021 the redundancy rates are at their lowest, since 2006. This does not include figures of smaller organisations making 20 or less employees redundant, but a potential positive for many employers.

On the flip side to that, it is apparent that businesses are struggling to recruit, recruiters have confirmed it is a hard market and some employers have even introduced a welcome bonus for employees who join their businesses as an incentive.

Employees returning from furlough

Where employers have been able to return furloughed employees to work, they should consider the terms of the furlough agreement that is in place; specifically any notice furloughed employees should be given to return to work.

Vulnerable workers should be supported and we encourage employers to  follow the government guidance for clinically extremely vulnerable (CEV) people to protect them from coronavirus.

CEV people should be offered home working or the safest available workplace roles. This may involve new alternative roles or working patterns, provided they consent to this.

Employers should have undertaken risk assessments well in advance to support the return of all staff.

Is your business still struggling from the effect of returning employees back from furlough?

Do you need to use the Layoff clause?

You may need to revert back to the contractual agreements you have in place with your employees. As a business, you are able to lay your staff off without pay as long as this clause is held within your contractual agreements.

There are specific statutory provisions which provide a right for employees who have been laid off for four or more consecutive weeks, or six weeks in any 13-week period, to claim a statutory redundancy payment in certain circumstances.

Do you need to restructure?

You may need to look at restructuring your workforce, considering the organisations expectations of work for the foreseeable future and to see what will work moving forward.

Do you need to make redundancies?

Unfortunately, the government’s furlough scheme and the above measures may not be enough to prevent you from having to make redundancies.   If there is a requirement for redundancies, the process must be as a result of a genuine redundancy situation.  You must provide reasonable notice, hold meaningful and fair consultation with the affected employees.

If this is not carried out correctly and the employee has more than two years’ continuous service, they may have a successful unfair dismissal claim.  Remember there is no minimum service requirement if the employee alleges unfair selection of redundancy due to discrimination.

If you have any specific questions about this, please contact The HR Experts who can guide and support through any changes like this.