HR professionals and employers now need to plan ahead to avoid a cliff edge whereby all their furloughed staff return to full pay as soon as the furlough scheme ends.
Furlough is part of the temporary short term solution to the current economic crisis resulting from the COVID-19 health crisis.
I will be lobbying Government for a staged ending of furlough. In the meantime I would advise that employers:
- keep furlough under review in respect of already furloughed staff, at least every three weeks. Can you get them back to work sooner rather than later?
- keep a watching brief on latest Government guidance on furlough to check eligibility rules – see Government Guidance updated and published on 4 April 2020
- consider how you will deal with annual leave entitlement during periods of furlough. Holiday continues to accrue and the latest Acas guidance suggests it can be requested and taken in the usual way during furlough and should be paid at the worker’s usual pay (i.e. holiday pay should be paid at the level that they would usually receive had they not been furloughed). Acas guidance on this was updated on 8 April 2020.
- ensure that you have all the necessary information required ready to apply for your furlough reimbursement as soon as the HMRC web portal opens for claims to be made later this month. See the Government guidance for details.
- ensure that you have good contact details for furloughed staff and that you continue to engage with them so far as you can via emails and virtual meetings etc.
- consider alternatives to furlough such as secondment to another employer who might need your staff. For example some NHS employers and food producers may be willing to pay you your full employee costs if you “lend” your staff to work for them for a period of time. This can be a win-win for all and it has distinct advantages over and above the furlough scheme such as full pay for the member of staff and no arbitrary Government defined end date and potential cliff edge as per the Government Job Retention Scheme and it can be much more flexible – i.e. with part time secondment options. Birketts can advise on how to structure this type of arrangement
- most importantly, plan now for the end of the furlough period. What will your cash flow, work flow and associated staffing requirements be on day one and day 30 and day 90 after furlough ends?
- Have you planned what your staffing needs are likely to be when things start to return to normal? Will it be a phased return to normal? How long?
- Will you want to give some or all of your furloughed staff notice to take some of their annual leave at the end of the furlough period – either in a single chunk of leave or to reduce the number of actual working days they work on return from furlough?
- Will you need to restructure and redeploy staff to different roles or parts of the business?
- Will you need to make redundancies?
- How many and from which groups of staff?
- How, when and how will you consult with them about this?
- Do you have elected employee or union representatives to consult with if necessary i.e. if more than 20 staff might be made redundant after furlough in a period of 90 days or less from any employer establishment. If not, now is the time to consider setting up elections for employee representatives. It’s quite likely that a Tribunal Judge may not be accepting of an employer arguing that there were “special circumstances” preventing it from complying with its collective consultation obligations, bearing in mind there are currently two months to plan and/or consult before the end of the furlough period.
- Will you want to seek agreement to longer term pay cuts or pay deferrals after furlough and/or reduced hours? Again formal consultation obligations will apply and you will need to seek agreement to this from affected staff.
For more information on the Employment guidance that Birketts can offer, or if you require
assistance with any of the matters referred to above, please speak to a member of Birketts’ Employment Team.
The content of this article is for general information only. It is not, and should not be taken as, legal advice. If you require any further information in relation to this article please contact the author in the first instance. Law covered as at April 2020.