Life after furlough – advice for employers

After more than 18 months, the revolutionary Coronavirus Job Retention Scheme, or furlough, came to an end on 30 September 2021, forcing those employers still using the scheme to decide about the future of their staff.

As of August 14 2021, approximately 11.6m jobs, from 1.3m different employers, were furloughed in the UK, according to Statista. Now that the scheme has come to an end, some employers will be in a position to welcome back staff to their contractual roles and honour pre-furlough terms. However, for others, the financial effects of the global pandemic mean that businesses are having to explore cost-cutting measures.

Here we look at the various options available to employers who are considering the future of their staff, post-furlough.

Bring back staff on their pre-furlough terms

Arguably the simplest of the options available is for employers to bring back furloughed employees on their pre-furlough terms, on reasonable notice.

For all employees returning from furlough, employers should consider what, if any, related steps are required to facilitate their return e.g.

• Consider your staff members’ wellbeing – Employers should consider what steps they should take to assist furloughed employees back into the workplace, some of whom may be anxious about returning after a significant period. Think about wellbeing meetings, training, adjustment to working hours etc.
• Holidays – Staff may be able to carry forward some of their statutory holidays if they were unable to take them in the current leave year.
• Flexible/Hybrid working? – We look at the concept of flexible working later, but briefly, employees have a right to make a flexible working request provided they are eligible by being continuously employed for 26 weeks or more.

Redundancy

Unfortunately, the reality for many employers is that there are more long-term challenges regarding the financial viability of their business meaning that redundancies will become a necessity.

Employers should ensure that the redundancy is genuine, and a fair procedure should be followed. Do take advice so that you handle the process in the right way.

Redundancy – is there another way?

Redundancy processes are not a quick and easy fix. They are far from cheap and so it would be worth considering the alternatives, especially if you’re keen to retain skilled staff.

Reduced hours or pay cuts

Reducing hours and pay is a change to terms and conditions which means that an employer will need the employee’s (written) consent. Although it is possible to impose a change (e.g. by way of dismissal and re-engagement), this is a complex, risky and time-consuming process – please seek legal advice.

Lay off and short-time working

Check if there is a contractual lay-off provision in the employment contract. If so, an employer could consider laying off its employees (e.g. retaining them as employees but not paying them). Subject to meeting the statutory terms, an employee may be able to claim a guarantee payment from their employer. That said, and to avoid breaching the implied term of trust and confidence, employers should still consult with their staff and give reasonable notice of any lay-off/short-time working.

Overtime

Think about not using overtime or, if it is necessary, amending the rate to standard rate rather than double time, for example. Remember that any changes to payment rates should be incorporated by consultation.

Sabbaticals

Some employees may welcome the prospect of a sabbatical (unpaid) as it gives them the opportunity to do something that they may have had to put off because of work commitments e.g. travelling, further studies, voluntary work.

Agency staff

For those employers that engage agency workers, terminating contracts with agencies will often be on short notice and at relatively low cost, thereby affording flexibility and immediate cost reduction.

Government Kickstart Scheme

Something that employers may not be overly familiar with is the government’s Kickstart Scheme, created to provide funding to create new jobs for 16 to 24-year olds on Universal Credit who are at risk of long-term unemployment.

Communication with staff is paramount. Keeping your staff informed – irrespective of whether it is good or bad news, will provide some degree of security and/or flexibility to make informed decisions. Good communication also makes changes easier to implement.