Around 11.6 million jobs have been supported by the Coronavirus Retention Scheme (or “furlough”) since it was introduced by the government on 20 March 2020. Designed to protect jobs during the darkest days of the pandemic, the scheme hit its peak on 8 May 2020, with a reported 8.6 million on furlough at that time but as of 30 September 2021, the UK’s furlough scheme officially came to an end.
It is no secret that that the furlough scheme has been extremely costly for the government with calculations by the National Audit Office suggesting spending of around £64bn. However, the government’s decision to bring the scheme to an end is not only based on preventing further expenditure, but also driven by the current encouraging employment figures. With the Office for National Statistics showing redundancies falling to pre-pandemic levels, at 3.4 per 1000 employees between May to July 2021, people are hopeful this is evidence of movement in the right direction as places of work and entertainment open up again to the public and we start to get a sense of normality.
Post furlough options for businesses
Some companies may still be forced to consider redundancies following the end of furlough, but before going down this route, employers may wish to consider alternative options, such as;
- Reduced hours – instead of having all furloughed staff return full-time, employers may choose to bring staff back on a reduced hours basis, provided they obtain employee agreement to this change. If staff agree, employers will need to make sure that any consultation and agreement is clearly recorded.
- Reduced pay for the same hours – it may be difficult to get employees to agree to this, although some may prefer it to redundancy. Again, employers will need to be sure to obtain and record the employee’s consent and ensure that they comply with minimum wage legislation.
- Redeployment or restructuring – some employers may choose to redeploy staff into other areas/departments if certain parts of the business have been phased out or less busy due to the pandemic.
- Agree a career break or sabbatical – this may be done in accordance with any existing career break/sabbatical policies or new documentation may be introduced. It may suit both employer and employee to agree to an unpaid break. It is likely that the employee will remain an employee during this period and will continue to accrue annual leave and maintain their continuous service.
- Work from home arrangements – Allowing staff the flexibility of working from home is likely to reduce overhead costs for a business such as office spaces, electricity and utility bills, stationery, and equipment.
A final note of caution, if redundancies are still required employers should be careful to follow a fair and proper process taking into consideration various factors around furloughed employees. For example, statistics show that more female employees were furloughed from July 2021 to May 2021 than men. Employers therefore need to be sure that women (or others on furlough) are not unlawfully disadvantaged in any selection for redundancy.
The highly experienced lawyers within our employment team can provide comprehensive advice to employers and employees alike, to help them adapt to changes brought by the Covid-19 pandemic and especially the end of the furlough scheme.
If you would like to discuss any of the issues addressed in this article then please do contact Elizabeth Maxwell, Solicitor in our employment team or another member of our employment team who would be happy to help.
Although correct at the time of publication, the contents of this newsletter/blog are intended for general information purposes only and shall not be deemed to be, or constitute, legal advice. We cannot accept responsibility for any loss as a result of acts or omissions taken in respect of this article. Please contact us for the latest legal position.