Covid-19: Considering Redundancies as Furlough Scheme Closes

22 Sep 2020

The furlough scheme is credited with saving many jobs, supporting businesses while they navigated the peak of the COVID-19 crisis. However, the scheme was never intended to stretch on forever, and businesses are now contemplating what the future looks like as furloughing employees starts to come to an end.

For some companies, the financial support of the furlough scheme and other measures won’t be enough to prevent job losses. If you’re faced with the possibility of making redundancies, these are the facts that you’ll need to know.

Q: Does COVID-19 mean that different rules around business restructuring now apply?

A: No. The basic employment laws remain unchanged so you’ll need to go through the same restructuring process as before. This means carrying out proper consultations and ensuring that equality laws are observed at all times.

Q: Do I have to bring my employees back to work when the scheme ends or can they remain on furlough?

A: There is no requirement which will force you to bring all your employees back to work. Should you prefer, you can ask them to remain furloughed. However, the difference is you will have to secure your employee’s permission and you will need to pay their whole salary yourself. You can negotiate to come to an agreement which is acceptable to both you and the employee, but this will have to be dealt with on an individual basis.

 

Q: Can I make someone redundant who is on furlough?

A: Yes. Redundancies can be made in the usual way, including those who are furloughed. It is important to make sure that any employees who are furloughed are included in the consultation in the usual, correct way.

 

Q: Are there any allowances being made in the consultancy process for employees who are working remotely?

A: Meaningful and inclusive consultation must still take place, whether your employees are working remotely or are furloughed. This can be managed either through the use of phone calls or video calling technology.

 

Q: Are there any alternatives to redundancy that an employer must consider? 

A: As an employer, there are several avenues you must explore to ensure that any redundancy is lawful. If you fail to follow these, you could face a claim for unfair dismissal. The options you should consider include: 

  • Whether there are any other vacancies within your company which could be offered instead of redundancy?
  • Whether redundancy is essential – this should be considered following consultation with your employees
  • Alternative working arrangements such as job shares or reduced hours. Some employees may be open to these suggestions rather than accepting redundancy.

There may be more factors to take into account. It is important that you are thorough, fair and honest when carrying out the consultancy stage.

Q: Do I need to wait for the whole furlough scheme to end to make redundancies?

A: If it has become clear that you won’t be able to operate your business with the same workforce as before, you don’t have to wait to make redundancies. You can choose to delay the redundancy process until the furlough scheme ends, or you can start it right away. Your only obligation is to ensure that your employees are made aware of the possibility of redundancy at the soonest possible opportunity.