Start preparing for the end of the furlough scheme

While we are still in the grip of the Covid 19 pandemic and the full opening up of the country is still in the balance, many employers need to turn their attention to the end of the Coronavirus Job Retention Scheme (CJRS), better known as furlough.

The scheme was put into place by Chancellor Rishi Sunak at the start of the outbreak and saw the Government pay up to 80 per cent of wages up to £2,500 a month. It was originally supposed to end at the end of May 2020, but has since been extended until the end of September this year.

It has been crucial to helping companies stay afloat and protecting jobs that would otherwise have been lost.

With the final deadline on 30 September 2021, businesses need to be ready for the day when support is no longer available and how to handle the return of staff or whether cutbacks need to be made.

Firms should decide when they need staff back and plan for a return to work, whether from home or in the office and the costs that will be involved.

Decisions need to be made on who to ask back and what roles are most important. The need is to focus purely on the role, not the person, to avoid discrimination.

Flexible furlough, where staff remain on furlough on a part-time basis, remains an option until September, so firms should consider using it.

Other considerations include:

  • Give staff as much notice as possible of their return. If you specified how much notice you would provide them in the original furlough agreement, stick to this timeframe.
  • You need to contribute 10 per cent to the furlough grant from July, and 20 per cent from August. This may prove costly if some staff are to remain on furlough.
  • Staff back from furlough, whether flexibly or completely, will need to be paid in full for the time that they work. It is essential that you make sure their pay packets are correct.
  • Keep costs down by freezing recruitment/training or hold off on pay rises for staff. If training or pay rises are contractual, get the employee’s agreement before making the change.
  • Encourage communication by make sure staff feel comfortable in coming forward with any concerns they may have.
  • If you are not able to bring staff back off furlough and are unlikely to do so after September, redundancies can be considered. Always make sure you follow a fair procedure.
  • As an alternative to redundancy, those employees who have been taken off furlough can be re-furloughed up until 30 September 2021.

The time to act is now as the end of the scheme will be upon us before we know. It gives time to consider difficult decisions and if staff are affected by cutbacks, time for proper consultation.

For help and advice, contact our expert team at AGS HR Solutions today to discuss your requirements.