Pay Online
Instant Conveyancing Quote
Tuesday, August 3, 2021
The Government’s furlough scheme is set to end 30th September so we thought it might be a good time to look at the implications, options and why we believe planning now, if not already undertaken is essential for employers.
Whatever your thoughts on the way the Government handled matters during the Covid-19 pandemic there is almost universal acceptance from employers, trade unions, employees and economists that the furlough scheme has been a success.
Without this lifeline for businesses, it is certain mass redundancies would’ve been necessary and with it the hardship and turning to an already creaking benefits system for hundreds of thousands of workers let go by their employer.
By introducing a scheme that enabled the employee to be retained albeit on a reduced income provided peace of mind for the worker their families and essentially enabled the ongoing relationship with the employer to be maintained.
As the saying goes, “All good things come to an end” and that’s going to be true of the furlough scheme at the end of September.
If you’ve not already made plans in readiness for this end date or if you have the following may prove helpful.
Managing Forward
Shake off that business plan or revisit your “pivot” whatever you had in mind to get through the pandemic the reality of your trading position and financial prospects should now be clearer. This could be a time for growth and optimism and in that case, you’ll be needing to call upon that furloughed workforce to hit the ground running. If things are not quite so bullish you may need to reduce costs and the advent of a fully funded workforce, often payroll being the biggest cost carried by a business, could result in a hit to the cashflow you won’t be able to sustain.
Either way you’ll need to look at the resources you have, cost to the business, and make fair and reasoned decisions if not already actioned.
Time to Engage
With restrictions on what you could or more often could not do with regards to engaging with your employees many companies simply kept communication to a minimum which may have met the compliance within the terms of the scheme but may not have proven so helpful for the staff. Regardless of your previous levels of communication with your furloughed workers now is the time to engage.
Before launching into any formal processes it could be very useful having an informal series of “catch up” sessions with furloughed staff.
The pandemic has given many people an opportunity to think deeply about their lives, their careers, their goals and ultimately what they want to do when life returns to normal.
These plans could include:
- Taking further full or part time education to re-train
- Already secured a new opportunity but yet to notify you
- Taking time with family and stepping out of work
- Taking a sabbatical and traveling for a year
- Setting up their own business
- Wanting to work part time
- Wanting to work remotely
Whatever the reason their plans could impact your own and as such it is worth exploring their position and assessing precisely where you are before making any formal announcements or at the very least offer staff the opportunity to give you an update on their situation if they’re ready to do so. A word of warning, try not to interrogate staff at this point especially if communication up to this point has been limited. Be empathetic and gauge how they present themselves.
Redundancy
If there’s no prospect of avoiding the loss of staff do not delay the process once you’ve re-connected with staff. No business owner or manager willingly volunteers to make staff redundant but if that is one clear decision from your review then the sooner you act the better for all concerned.
You should use a fair and objective way of selecting candidates for redundancy.
Commonly used methods are:
- last in, first out (employees with the shortest length of service are selected first)
- asking for volunteers (self-selection)
- disciplinary records
- staff appraisal markings, skills, qualifications, and experience
If the job no longer exists you can make staff redundant without having to follow a selection process, for example if:
- you’re closing a whole operation and making all the employees working in it redundant
- they are the only employee in a role within the organisation that is no longer required
If there are alternative opportunities for work you could look to re-deploy to a different role.
Consultation
You will need to consult with your employees if they’re being made redundant. This involves speaking to them about:
- why they’re being made redundant
- any alternatives to redundancy
If making less than 20 redundancies, there are no rules about how you should carry out the consultation. If they’re making 20 or more redundancies at the same time, the collective redundancy rules apply (see below).
Length of consultation
There’s no time limit for how long the period of consultation should be, but the minimum is:
- 20 to 99 redundancies – the consultation must start at least 30 days before any dismissals take effect
- 100 or more redundancies – the consultation must start at least 45 days before any dismissals take effect
Check the contract terms and ensure that you are fulfilling your obligations with regard to their contractually agreed arrangements.
Hiring Staff
This is a far more positive project but could prove equally daunting as there is still a great deal of uncertainty around the pandemic and recruitment has proven quite a fraught and costly experience for many businesses during the past 16 months.
With many individuals re-thinking their careers, life choices and work/life balance the process of hiring can seem quite difficult not least since the majority of interviews are still being conducted remotely.
The key is to have a very clear outline of the role, how you have managed through the pandemic and what measures you have in place to provide a safe and secure environment for staff.
Sector Challenges
Roles in leisure, retail, transport and hospitality are very often front facing and the demand for experienced staff is likely to increase with supply being an issue. Brexit has also played a part here with a number of seasonal workers being repatriated leaving businesses critically short handed. Here you will need to be creative and work hard at standing out. What you may need to face is the prospect of salaries creeping up as available candidates become fewer and fewer.
Contracts
This also might be a good time to look at your contracts of employment and ensure that they reflect the expectations of working within your organisation in light of the pandemic and the manner in which your business operates.
Compliance
Regardless of the urgency and potential scarcity of suitable candidates do not overlook required compliance such as DBS checks and references.
Re-boarding
The advice in these circumstances is to balance the needs of the business with the care and welfare of your staff. The past 16 months have been very tough and furloughed staff have not necessarily had it easy. Being outside of an organisation can lead to anxieties and negative thoughts about worth and future prospects. Be prepared for some challenging moments as you re-board furloughed staff and work on how they may be best integrated back with staff who may have continued to work throughout this period. There have been enough divisive issues to handle during the pandemic and the returning of staff to your business should be celebrated as another step toward normality and less stressful times.
Written by Robert Gibson, Senior Consultant - Employment Law
Robert is a Senior Consultant at Samuel Phillips and specialises in employment and business matters. He advises in relation to employment and shareholder disputes, including pensions and related issues.
