Is Redundancy Still A Threat If You’re Furloughed?
The UK government’s furlough scheme, which was designed to support businesses that were forced to close due to the Covid-19 pandemic and help protect jobs, will run until the end of July in its current form. From August until the end of October, the cost of the scheme will be shared with employers, although details of how that will operate have not yet been released. Employers using the furlough scheme will have more flexibility and will be able to bring their employees back to work part time whilst still receiving some support.
According to figures from the Chartered Institute of Personnel and Development (CIPD), the scheme has prevented four million redundancies in the UK in recent weeks.
Official figures show that 6.3 million workers have been furloughed, with the government paying 80 per cent of their wages up to £2,500 a month.
The CIPD research found that over half of the workers who have been furloughed would likely have been made redundant if it were not for the government’s Job Retention Scheme.
But while the furlough scheme has undoubtedly saved millions of jobs, being furloughed doesn’t protect an employee from redundancy. Employers do still have the right to make redundancies, even if employees are furloughed. However, such an approach is not without risk of an unfair dismissal claim in certain circumstances and, therefore, employers do need to look at alternatives to redundancy where possible.
It is important that any business that is planning to make redundancies follows a fair redundancy process, including carrying out a consultation with all staff who could be laid off. There are additional strict statutory collective consultation requirements where the number of redundancies is 20 or more within a period of 90 days. Employees who are made redundant will be entitled to statutory redundancy pay, provided that they have been with their employer for at least two years. Some employees may have enhanced contractual redundancy provisions and payments under their contract of employment, or they may be offered more favourable terms as part of an exit package.
The economic fallout of the Covid-19 pandemic is likely to continue for some time and there will certainly be businesses that struggle to recover, even when the lockdown restrictions begin to be lifted.
If your business has furloughed workers but you’re unsure of how you will cope when the government support begins to be reduced and are concerned about how to approach the redundancy process, speak to our solicitors in Chesham, Amersham, Beaconsfield to make sure that you follow correct redundancy procedures.