Post furlough options: where are we now?
With no indication that the Job Retention Scheme will be extended beyond 30 September 2021, employers are looking at what happens once wage assistance is no longer available.
Workers who remain furloughed are receiving wages that are part Government funded and part employer funded. From the start of August 2021, employers have to contribute 20% to furlough pay, to a maximum of £625 per month. This means that employers are having to ease themselves out of furlough but losing wage assistance from October is a different thing entirely.
So what can employers do once furlough under the Job retention Scheme is no longer an option:
This may seem a little odd; most were not aware of this before March 2020. However, the Job Retention Scheme and furlough are separable. Employees would still do no work for you but under terms agreed with you. This might mean a change the wage level they receive, and it would certainly mean changes for employers; they would have to fund all of furlough pay now that recourse to the Job Retention Scheme is not available.
Changes to terms and conditions
Employers may choose to make structural changes to their workforce, such reducing pay or other monetary elements like enhanced pension scheme contributions or maternity pay. This can have a significant impact on employees, so consider how best to ‘sell’ it.
You’ll need to consult, meeting with employees (or their representatives, depending on numbers) and discussing the changes. Explaining your circumstances may encourage agreement. If employees see this is the only way, or face redundancy, they may be more likely to choose job security.
If employees don’t agree, you may still be able to proceed by dismissing them on their current terms and re-engaging on the new terms. You will have to follow the normal rules to achieve a fair dismissal. Without this, you could face a claim at employment tribunal.
Enforcing changes without agreement could lead to constructive dismissal claims if the employee considers themselves forced to resign.
Lay-off and short-time work
Lay off and short time working are the better-known alternative to redundancies. In lay-off, employees don’t work at all. Short time working is a reduction in hours. Most employers already have a term for this in their contractual documentation, but if not, it would have to be agreed at the time to avoid a breach of contract. Otherwise, the employee should receive full pay if they’re asked not to work.
Lay off is currently paid at £30 per day for the first working week in every 13-week period they are on it.
If one area of a business has less need for staff, you could move employees to a different role, temporarily, or permanently. You will need to give reasonable notice of this, and you both should have the opportunity to decide if the new role is right for the employee.
Practically, you will need to consider where the employee is working. If they are still at home, and the role is office based, will they be required to come in, and is this suitable for them? Or vice versa, are they moving into a home-based role but prefer office working? This is a scenario many employers will have to consider.
This should be a last resort option. Asking for volunteers, rather than compulsory redundancies, is likely to go down better.
However, you should:
- Make it clear not all volunteers will be accepted (so skills can be retained)
- Define the selection process if more staff come forward than required
- Avoid a policy of not re-hiring volunteers (this can be indirectly discriminatory).
If this is not enough, you will have to start a meaningful consultation process, possibly with representatives if enough employees are involved, involving meeting with staff, and discussing the proposals. If you must choose between employees, a selection process should be followed.
Employees may have accumulated a lot of annual leave, and this could be a good time for them to take it to tide them over until work picks up to a sufficient level. Alternatively, a career break or sabbatical may appeal to some.