Are You Ready for the End of Furlough?

08 June 2021 - Elizabeth O'Hanlon

One of the government’s key support schemes during the pandemic has been the Coronavirus Job Retention Scheme, more commonly referred to as furlough. More than 11.4 million jobs have been supported the by scheme which has been used by 1.3 million employers. So far it has cost £57.7 billion. The furlough scheme works by the government allowing employers to claim back up to 80% of their employee’s wages for the hours they are unable to work, up to a maximum of £2500 per month. More information about the furlough scheme can be found here.
When will furlough end?
As lockdown restrictions are lifted, the percentage of a furloughed employee’s wages that an employer can claim back has been gradually reducing, and Rishi Sunak has confirmed that despite the delay to the final ‘Freedom Day’ ending of lockdown measures, there will be no further extensions to the existing furlough scheme.
The current furlough scheme is scheduled to start winding down on 1 July, when employers will need to start paying 30% of a furloughed employee’s wages, as the government contribution reduces to 70%. That percentage of support will continue to be lowered each month until the end of the scheme on 30 September 2021, after which point the employer must pay 100% of their employees’ wages.
Returning to work after furlough – for employers

  • Well ahead of the end of furlough on 30 September 2021, employers should prepare a business plan to outline any changes that need to be made, both in the short and medium term, and their strategy regarding any employees that are still on furlough. Cash flow planning is central to any plan, and of especial importance as government business support schemes start to wind down.
  • The business plan should take into account all alternatives to compulsory redundancies, which may include changes to an employee’s hours and pay, offering them other vacancies, voluntary redundancy and recruitment freezes.  
  • If an employee is at risk of redundancy, then speak to them on a one-to-one basis first to talk about the post-furlough business situation, so that they can understand the position that now faces the business and its employees. This should be done before any formal ‘at risk’ meeting.
  • If you do need to have an ‘at risk’ meeting with an employee who may be at risk of redundancy, it is important to follow ‘fair procedure’. This entails sharing the business case with them, as well as ensuring they are aware that no final decision has been made. This is an opportunity for you both to consider any alternatives, and to discuss their individual situation, to make sure they feel informed and supported throughout the process.
  • For employees that are coming back to work after a period of furlough it’s vital to make sure they are properly informed about any measures that may have been put in place to minimise health risks to everyone. These can include new protocols such as wearing face masks and observing social distancing, one-way systems around the workplace, kitchen and bathroom hygiene requirements and procedures for customers or other people who may visit the premises.

Returning to work after furlough – for employees

  • The furlough scheme will end on 30 September, so well in advance of that date you should be thinking about your return to work.
  • Hopefully your employer has kept in touch with you to keep you informed about the business, so you can discuss any issues you may have, or any changes to your individual situation that may have arisen during the time you’ve been on furlough.
  • If you have any thoughts about changes to your contract, such as the hours you work, now is the time to talk them through with your employer.
  • If there is any question of your position being made redundant, your employer will set up an ‘at risk’ meeting to explain why this is the case, and the process and timelines that need to be followed.
  • If you are going back into the workplace after having been furloughed, there will almost certainly be new practices you must adhere to, such as the need to wear face masks, use sanitiser, and observe social distancing. Many businesses are running reinduction meetings, to help ease people back in, and to make sure everyone is fully aware of with any new procedures which need to be followed. Good luck!

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