Soon after the UK went into lockdown in March 2020, employers were faced with a brand new concept in the world of employment, ‘furlough’. The brand new Coronavirus Job Retention Scheme (CJRS) known as furlough, has supported over 1 million employers since it was introduced and is now due to end on 30 September 2021.
As the UK relaxes social distancing measures and there is no suggestion that the scheme will be extended further, we consider what this means for employers and those returning to the workplace.
Tapering out of furlough pay
Those continuing to rely on the scheme must budget for the reduced financial support with their payroll, as full responsibility for the normal pay of their workforce is promptly phased back in.
Subject to a set monthly cap, the government continued to fund 80% of wage costs until the end of June and from July they funded 70% of pay and required employers to pay 10% of the hours not worked by their employees.
The beginning of August saw the contribution from employers increase further to 20%, with the government’s funding reducing to 60%. This contribution will continue into September until the scheme ends on 30 September 2021.
The act of ‘un-furloughing’ has never been used in the UK prior to COVID-19, so there was no pre- precedence around how to administer it. However, we do know that we have certain legal obligations stipulating how we should treat our employees, and this should guide us in how we manage bringing employees back.
Businesses must act in accordance with existing employment legislation, whether it is the Equality Act 2010 which protects people from discrimination, or the Employment Rights Act 1996 which protects wages and people from being unfairly or constructively dismissed.
Determining an ‘un-furlough’ strategy upfront will help to ensure it is carried out fairly and objectively. It will also mean you have a documented thought process to evidence this approach should it ever be challenged.
Although there is limited time left to take advantage of the scheme, employers may wish to acclimatise by using the option to flexibly furlough employees to help in their return to work. You can decide the hours and shift patterns that your employees will work on their return so long as you pay them in full for any hours they are working.
Employers who are having to contemplate redundancies need to be aware of the timescales for consulting and how these align alongside the furlough scheme. The timescales for consultation are:
- 45 days of consultation before the first dismissal, if you have 100 or more employees that you propose to dismiss as redundant within a 90-day period.
- 30 days of consultation before the first dismissal, if you have 20 or more but less than 100 employees that you propose to dismiss as redundant.
- If you have less than 20 employees that you propose to dismiss as redundant, there is a need for ‘meaningful’ consultation, which should take place over an appropriate time frame.
This means that organisations who need to go through this process in time for the end of the furlough scheme, need to be reviewing their circumstances, drafting a business case justifying the potential need for redundancy dismissals, and devising a schedule for the process now, so that they are ready to announce the start of consultation in good time.
Businesses always need to consider appropriate ways in which they can avoid or mitigate redundancies. Many employers utilise lay-off or short-time working clauses in the employment contract as a temporary alternative. Whether wanting to invoke lay-off or redundancy, HR advice should be sought to ensure that the process is legally fair.
Although most restrictions are no longer in force, businesses are still strongly encouraged to continue to operate in a COVID-secure manner and follow the advice as it evolves. Moreover, employers must ensure that both they and their employees continue to comply with health and safety legislation, and as such managing the risks of coronavirus must continue to be part of your on-going workplace risk assessments.
It is important that all staff are aware of the risks and what their employer is doing to keep them safe whilst at work. It will also help alleviate any nervousness that may exist in returning to the workplace.
Promoting a good safety culture increases productivity, performance, and workplace morale. Consider involving staff when undertaking risk assessment reviews so they feel part of the process but also to help them have a better understanding of COVID-19 in the workplace and how the risk of transmission can be reduced by the measures you take. Also consider a safety committee made up of different people from different teams so that all knowledge can be shared, and all risk assessments completed and reviewed.
At this time, it would be best practice to review all risk assessments where many staff have not been at work and you are considering bringing them back. There would be no better time in completing this exercise and to have the confidence in knowing that all practices and procedures have been reviewed and are in the best shape to welcome teams back safely.
A Plan For Jobs
Looking ahead to the future, A Plan for Jobs is a government scheme which aims to support young people, who are believed to be the most vulnerable group for employment as a result of the pandemic by providing employment opportunities which should also support the UK with both short and long-term recovery.
Employers may be able to make use of initiatives under these schemes as they rebuild their business and workforce, including the Kickstart Scheme which gives employers a grant to create jobs, apprenticeships with the increased incentives for hiring apprentices available until 30 September and lastly traineeships which provides employers with £1,000 for providing work experience per trainee.
We hope this has outlined to you what the future of the workplace will look like once furlough ends. If you require any more information on any of the government COVID-19 schemes, loans or grants, or anything accounting related for that matter, please do not hesitate to get in contact with us at Nordens where one of our trusted advisors would be happy talking you through your query.
About the author
Karen Falconer is a HR Knowledge Manager at HR Solutions, an outsourced HR services firm offering employment law, and health and safety support and advice to businesses across the UK.