The Coronavirus Job Retention Scheme, more commonly known as the furlough scheme, is due to end on 30th September 2021.
Employers should have been thinking about what will happen when the furlough scheme ends. The purpose of the furlough scheme was to enable struggling businesses to retain their workforce during the pandemic until they were better positioned to continue when the market recovered. It has, and continues to be, a very challenging time for both employers and employees.
Many employers will be ready to welcome employees back into the workplace to their previous roles and pay, however, not all businesses will have financially recovered sufficiently to do so. Employers should have been planning and communicating clearly with its workforce about what will be happening.
A return to the workplace
Thought should be given as to how employees will be best integrated back into the business, for example, providing updates and training where required. Many will have been away from the workplace for several months and a return will be a daunting prospect for some.
The way in which work is undertaken may also change, for example, hybrid working, which can be particularly beneficial for employees with caring commitments whilst allowing the business to retain key personnel. Contracts and policies should be reviewed and updated.
Where the business is struggling financially
For some businesses, the removal of government support will result in additional costs with potentially dire implications financially. It is likely that many businesses in this position will seek to impose measures, perhaps on a temporary basis, for example, a reduction in working hours, short-term working or to invoke contractual lay off provisions. Employers should consult with its workforce and ensure that it is adhering to the correct process otherwise claims in respect of employment rights may arise.
Summary
It is likely that there will be an increase in redundancies over the coming weeks, particularly as the furlough leave scheme comes to an end. It is anticipated that eligible employees seeking to challenge the fairness of the process will issue complaints of unfair dismissal at an employment tribunal.
It is also likely that employers will seek to remove its risk by inviting employees to enter into a Settlement Agreement (formally a Compromise Agreement). This is a confidential document that will prevent an employee from pursuing their employment rights in return for a financial settlement. It is important that an employer ensures that it has sufficient protection in the Settlement Agreement and also on the employee’s part, that they obtain independent legal advice.
If you would like to discuss any of the issues in this blog, please contact us.
