After being extended to October 2020 and then to April 2021, the Coronavirus Job Retention Scheme, or Furlough Scheme as it is more commonly known, is finally due to conclude at the end of September 2021, and bar a last-minute change of heart by the Government, it looks like this will be the end!
It is reported that around one million employees will still be on furlough when the scheme ends, therefore decisions need to be made now about these workers and their return to work, or otherwise.
Furlough was always intended to support employees for whom there was not enough or no work to sustain their job because of the effects of the pandemic. At this point, with the imminent closure of the scheme, employers should already have a reasonably accurate idea as to whether they can afford to bring furloughed workers back into the business.
Options at the end of Furlough
There are four available options for what employers can do with furloughed workers:
- Bring them back to work under the same terms and conditions as before furlough
- Bring them back under new terms
- Dismiss, if less than two years’ service
If a change of terms is required to make it cost effective for workers to resume, such as reduced hours, reduced pay or both, then this requires a period of consultation and employees need to agree to the changes. If changes cannot be agreed upon then the “fire and rehire” option is available however this is quite a drastic measure that comes with risk and should only ever be used as a last resort.
If there isn’t enough work for the employee to come back to and they have been employed for less than two years, then normally, they can simply be let go without consultation or redundancy. However, remember to factor in notice periods which employees are still entitled to.
Finally, there is the redundancy option. Redundancy always requires a consultation period, which should be factored in and started ASAP if not already. Employees will be entitled to a minimum of statutory redundancy pay (which can be calculated here) and notice pay.
Employers please note!
Regarding fair selection for redundancy, let’s say that a company has 10 employees in the same role, eight are at work and two remain furloughed. If at the end of September there is only enough work to sustain the eight working operators and two redundancies are required, then all 10 staff members must be put at risk and a selection process undertaken. Simply making the two furloughed staff members redundant comes with a high risk of being discriminatory and unfair.
For a free 15 minute consultation on this or any other employment issue please get in touch.