Preparing for redundancies when furlough ends

Preparing for Redundancies After Furlough

As businesses across the UK continue to navigate their lockdown egress, one key element from the last 18 months will cease to exist – the furlough scheme.

From 1st July 2021, we saw decreases in the amount of financial support employers were eligible to claim. It was a planned reduction, which aligned with the government’s wider plans to loosen the grip on lockdown measures and reinstate pre-pandemic life. In July 2021, employers could claim 70% of an employee’s wages for hours not worked, which was capped at £2,187.50 per month.

For August 2021, employers were able to claim 60% of an employee’s wages for hours not worked, capped at £1,875.00 per month. These figures will also roll into September before the furlough scheme comes to an end on 30th September 2021.

The furlough scheme has provided businesses with significant financial savings during the pandemic. However, notwithstanding these savings, many businesses may find themselves in a situation where they are forced to consider cost saving measures, especially if they have not fully recovered by the end of the furlough scheme in September 2021.

Even though the wind down of the furlough scheme represents another step towards normality, it also means income losses for many who may find themselves unemployed. This would result in an income drop for those who move from furlough to unemployment.

Employers may be planning redundancies in the forthcoming weeks and months, especially as we get closer to the 30th, and therefore should have begun the process already. Otherwise, they will probably find themselves footing a hefty bill if their actions fail to comply with consultation obligations.

What’s the process?

There is a specific procedure that should be followed by employers when they are making individual employees redundant. The law dictates a different, more complex procedure when large scale redundancies take place. As such, where an employer proposes to make 20 or more employees redundant from one establishment within 90 days or less, an employer should follow a collective consultation procedure. Employers must consult with their employees before finalising any redundancies.

If they do not hold genuine and meaningful consultations before making redundancies, employees could claim to an employment tribunal for unfair dismissal. During consultation, the following should be discussed:

  • the changes that are needed, what you plan to do, and why
  • ways to avoid or make fewer redundancies
  • the skills and experience needed for the future
  • the criteria for selecting employees for redundancy
  • any concerns employees may have
  • how you can support and arrange time off for affected employees, for example to update their CVs and get training

Has your employer been following the correct procedure for making redundancies before furlough ends?

My team regularly help individuals who have been made redundant unfairly, and if their employer hasn’t followed the correct protocol in doing so. We understand the implications redundancy can have on people, their families and their lives, and we are dedicated to making sure we represent each individual case in the best way possible.

Find out more about how we can help you if you’ve been made redundant. Or, you can call us free on 0808 164 0808.

About the Author

Neha Thethi

Neha Thethi

Head of Employment

Neha leads Lime's employment team. She is a member of The Employment Lawyers Association and the Discrimination Law Association.