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Managing the end of Furlough

Managing the end of Furlough

After playing a crucial part in managing the impact of Covid-19, the Covid Job Retention Scheme (CJRS) is set to end on the 30th of September.

Although some business sectors, especially hospitality, are currently seeing severe staff shortages, other employers may struggle when furlough is phased out.


For September, CJRS only covers 60% of an employee’s wages, up to a cap of £1875, with the employer having to top this up to at least 80%. All claims must be made by the 14th of October.

 

Redundancies


If you find you do need to restructure your staffing levels, any furloughed staff who are to be made redundant have the same legal rights as any other employees. So any decisions need to be mindful of unlawful discrimination or unfair dismissal.


A business may select staff for redundancy based purely on the fact that they were the ones to be furloughed. The level of risk to this will approach will depend on the reasons why staff were chosen for furlough, the selection process used to do this, and whether these were fair. Large groups of 20 or more redundancies will require collective as well as individual consultation.

 

Alternatives

There are a few alternatives to redundancies that can be considered:

• A hiring freeze
• Redeployment of staff to a different area of the business
• Postponing salary increases
• A temporary reduction in hours across the workforce

A temporary reduction in hours could be run on a similar basis to flexible furlough, just without government support. Experienced employees are retained, and employees should be better off compared to being made redundant and having to claim Universal Credit. Employee consent is required to alter contractual terms.

 

Payments & Support


If you do have to make employees redundant, then they are entitled to statutory redundancy payment (after two years of employment) and untaken holiday pay. There may also be notice pay, depending on circumstances.


The main form of support for most employees until they find alternative employment will be Universal Credit. This is a very different animal to furlough, and for many, there will be a big drop in income.


This will certainly be the case for higher earners because Universal Credit doesn’t take account of previous income levels. Anyone with a high earning partner or significant savings may not be entitled to claiming at all.

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