Paris Smith: end of furlough scheme – key considerations for employers

The Government’s furlough scheme is due to end on 30 September 2021. Any business with employees on furlough needs to start thinking carefully about the next steps. 

Here are a few of the main considerations that employers will need to grapple with over the coming weeks:

When to bring an end to furlough leave

Employers need to consider when to end an employee’s furlough leave based upon the needs of the business. Some of the key considerations are:

1) Which roles are required back first – or at all?

2) Which employees should remain on furlough due to their specific circumstances, such as health or childcare issues?

3) The increased cost of the furlough scheme and reduction of government assistance up to 30 September 2021

Some employers will need to leave staff on furlough until the expiry of the scheme. For others, business may have recovered enough to allow them to end furlough leave for staff earlier and welcome them back to their roles.

Communication and notice

Clear communication with staff on furlough is crucial. Employees on furlough may well feel isolated – employers who are open and transparent with staff on furlough will help them feel informed and included. Employers need to ensure appropriate notice to end furlough leave is given in line with any furlough agreement in place.

Integration and information

Employers need to consider how best to integrate staff who’ve been on furlough back into the office. They need to make sure employees have been informed that a Covid-19 risk assessment has been undertaken and informed of measures put in place to mitigate the risk of Covid-19 infections in the workplace. Doing this should go a long way to allaying any concerns furloughed staff have about returning to the workplace.

Employers who’ve put in place flexible, or hybrid-working schemes, need to make sure they update those who’ve been on furlough.

Changes to terms and conditions of employment

A key consideration for employers will be whether they’re in a financial position to welcome any furloughed employees back to their roles, or whether they need to consider a permanent or temporary change to terms and conditions of employment (such as a reduction in pay). Any changes to employees’ terms and conditions of employment will require employee agreement. 

Where possible, it’s best if any changes are presented as a temporary arrangement that will be reviewed after an agreed period of time, e.g. six months. Where possible, another option would be to consider redeployment to another role – again, this will require employee agreement.

The 'R' word

The Office for National Statistics reports that the rate of redundancies recorded since the beginning of the pandemic already exceeds the highest rate reached during the 2008/2009 financial crisis. It’s inevitable that many employers will have to make redundancies once the furlough scheme comes to an end. Those employers will need to prepare for a formal redundancy process. 

A fair process must be followed and it’s important this is planned. It will involve individual consultation with those at risk (collective consultation will be required where an employer proposes to dismiss 20 or more employees over a 90-day period), a consideration of alternative vacancies and a redundancy payment to those who are eligible (either statutory or enhanced if such a scheme is in place).

Pictured: Andrew Willshire, associate solicitor in the employment team at Paris Smith

About Paris Smith

Based in the central South, Paris Smith provides the full range of legal services to businesses, organisations and individuals.