Update 16 July 2020
Can employers make employees redundant while furlough is available?
It is our understanding that this is possible, however it does depend on the individual circumstances, and also ensuring redundancy can be demonstrated to be a fair reason for dismissal.
As a reminder, employees with two or more years’ service can claim unfair dismissal, and although redundancy may be reasonable in the circumstances to dismiss, there is an argument it may be unfair to make employees redundant while the job retention scheme is available as an alternative.
Employers need to carefully consider all the circumstances at the time and the options open to them when making their decision, and it may not necessarily be unfair to make employees redundant when furlough is available.
Update 1 June 2020
Summary of the new Job retention Scheme details announced last week.
- If employers wish to furlough any employees, who have not previously been furloughed, the final date to do this will be 10 June 2020
- From 1 July the scheme will allow flexibility to bring employees back part time while still receiving furlough pay.
- In July, the government will continue to pay furlough as before - pay 80% of wages up to the cap of £2,500 plus Employer NI and pension contributions.
- In August, the government will continue to pay 80% of wages up to the cap of £2,500 but the employer will meet the Employer NI and pension contributions on the furlough sums.
- In September, the government will pay 70% of wages up to a cap of £2,187.50 – employers will pay the cost of Employer NI and pension contributions and 10% of wages to make up 80% of the total up to a cap of £2,500.
- In October 2020: the government will pay 60% of wages up to a cap of £1,875.00 – employers will pay the cost of Employer NI and pension contributions and 20% of wages to make up 80% of the total up to a cap of £2,500.
Update 12 May
Chancellor has extended the current scheme until 31 October 2020.
- Furloughed workers across UK are able to receive 80% of salary (up to £2,500)
- It will stay in it's current format until 31 July. (Furloughed workers cannot carry out any services for their employer)
- From 1 August, new flexibility will be introduced to get employees back to work and boost economy.
- Furloughed workers will be able to return to work on part time basis and still receive 80% of salary (up to £2,500).
- Employers will be asked to pay a percentage towards the salaries of their furloughed staff and start sharing with the government the cost of paying salaries.
- More specific details and information around its implementation will be made available by the Government by the end of May.
How can we "pivot" our business change to meet the challenges of the new normal?
- There has been a shift to working from home, with investment in providing equipment and access to IT systems.
- There has also been an increase in business opportunities being transacted online.
- Can you structure your work space to make it more effective yet ensure safe social distancing?
- Is it possible to rotate staff working from home on some days?
- Can you make the most of your current products and services to offer something different and on-line?
- Do your staff have the skills and expertise to make this happen?
If we can return to open our business soon, there may not be enough work for everybody.
- You should carry our a coronavirus risk assessment and maintain social distance wherever possible.
- Put in place appropriate measures, including use of PPE, and ensuring any vulnerable workers are placed in the "safest possible roles".
- Phasing in how you bring staff back to work will need to be carefully considered. If staff are "on furlough" or working from home, then you can assess the best way to do this.
- Continue to monitor the wellbeing of any staff working at home.
Once the Job retention scheme ends on 30 June, we may not be able to keep all our staff, what are our options?
- Discuss your financial situation fully with your professional advisors/accountants.
- If the Job retention scheme is not extended further beyond 30 June, and you wish to consider reducing your staff numbers.
- If this is a temporary situation and you think it will improve, you could consider lay-off or move to short time working, if your staff have appropriate clauses in their employment contracts, recommend you have this fully checked.
- If redundancy is an option you need to consider, reminder there is a consultation process required.
- Consultation process is 30 days for 20 or more roles to be made redundant. (45 days for 100+ staff.)
- Consider starting the consultation process when required as part of your planning process.
Can we keep in touch with Furlough staff?
- Employers are encouraged to keep in touch with their staff who are on furlough or working from home.
- Keep communicating to keep them up to date with developments.
- Also monitor their mental and physical wellbeing
- Provide support where necessary,
- Advise/remind staff If they have access to any Employee Assistance Programme
More information coming soon.
Any other questions please get in touch.