What are your options after the furlough scheme ends?

After a year and a half, and multiple extensions and iterations in light of the continued challenges posed by the pandemic, the Coronavirus Retention Scheme (Furlough) is set to come to an end on 30th September.

Official government statistics show that a total of 11.6 million jobs were put on furlough for at least part of the duration of the scheme. Back in July, data revealed that since March almost 3 million people were moved off the furlough scheme as the economy began to bounce back and businesses reopened – however, recent ONS Business Insight and Conditions Survey (BICS) data shows that an estimated 1.1 to 1.6 million people are still on furlough.

The question remains, how will employers manage the return to work for employees affected by furlough when the scheme ends?  In this blog we’ll explore the options available to employers when this happens.

1. Bring employees back on the same pre-furlough terms and conditions

For all employees returning from furlough, employers should consider what steps are required to facilitate their return – such as health and safety risk assessments, consultation with employees and reasonable adjustments for disabled employees. Ease the transition back into the workplace by keeping communication open beforehand and take the time to contact returners before they come back. Let them know key details about when and where and give them as much detail as you can about what you will be expecting of them task wise. It’s probably going to feel very different at first as we all adjust to a new way of working, so the more detail you can give them, the easier it will be for you to help them to manage this change.

It’s worth recognising that being away from the business for some time may affect the employees’ levels of engagement with the organisation. Even short periods away from work can change our feelings about our jobs and in this situation, it may well have come with financial stresses or picking up alternative employment during furlough to keep financial stability. This can give people a different perspective on their employer and their colleagues. That means that the psychological contract may change,  resulting in an increase of leavers from the business.

If you are a line manager, it is vital that you support people in getting through this transition back to work. That means extra communication about expectations, regular check ins and the use of all of your listening skills.

2. Reduce costs without making redundancies

There are a number of options for employers seeking to end furlough and reduce payroll costs without reducing headcount:

• Asking employees to return on reduced hours and pay;
• Asking employees to return on the same hours but reduced pay;
• Asking staff to take unpaid or part-paid leave;
• Short-time work and lay off

Any variation of contractual terms and conditions will require consultation, the employee’s written agreement and reasonable notice.  Hopefully, the changes will be for a temporary period and therefore result in agreement.  However, if agreement cannot be reached the employer should consider if their business case is strong enough to withstand a formal process, ultimately resulting in the employment contract being terminated and the employee being offered a new one reflecting the reductions.

3. Make compulsory redundancies

Even for those businesses who have so far managed to survive the economic crisis, further job losses may still be inevitable. However, redundancy should always be the last resort – consider redeployment or voluntary redundancy as an alternative.

If you do have to make redundancies, then workers are entitled to a fair process. This means there should be a consultation period before any dismissal takes effect. If you are proposing to dismiss 20 or more people you must follow ‘collective consultation’ rules.  If 20 to 99 people are potentially being dismissed, a minimum 30-day collective consultation timeframe is required. For 100 people or more, this rises to 45 days. You’ll need to notify the Redundancy Payments Service before collective consultation begins. If fewer than 20 people face dismissal, there is no set timeframe. However, you should avoid sudden action – meaningful consultations will take at least two full days. Outside of that time, take into account how much time and effort is required to schedule meetings, notify employees and provide adequate resource for note taking when considering the overall length of the consultation period. If your HR team will struggle with this, consider outsourcing the administration process with our Meeting Manager solution.

If you are an employer, and you fail to carry out a redundancy procedure fairly, or use the process to dismiss employees unfairly, this can leave you open to claims for unfair dismissal.

For more guidance on preparing a business case for redundancy, read our best practice blog or watch our webinar.

Need help?

If you need further information or help in managing a redundancy, restructure, reorganisation or variation of contract process, AdviserPlus can help. Please contact us at: info@adviserplus.com and one of our employee relations experts will get in touch.