The Job Retention Scheme (JRS) or ‘furlough scheme’ has been a lifeline to businesses all across the UK over the last few months, but the end of the scheme is fast approaching…
It’s due to end on 31st October 2020, and if you’re one of the hundreds of thousands of businesses with staff on furlough, then it’s time to start preparing for what to do when the scheme stops.
And that leaves you with a lot to consider. But first, let’s look at the changes to the JRS as it starts to wind down.
The final two months of furlough
September
Employer contributions rose to 10% this month. The government pays 70% of an employee’s wage, and employers still pay National Insurance and pension contributions.
October
Employer contributions will rise to 20%. The government pays 60% of an employee’s wage, and employers still pay National Insurance and pension contributions.
What happens next?
When the JRS ends, furloughed staff will automatically resume the job they were doing before they went on furlough—whether this means returning to the workplace or working from home.
But what if your business has changed because of the pandemic and you can no longer afford to keep your staff and run your business as before?
Well, you’re not alone. The pandemic has left lots of business owners with tough decisions to make about their staff—but redundancy should always be a last resort.
Alternatives to redundancy
Before considering making a redundancy, you need to consider all other alternatives, such as:
Reducing working hours
You could change an employee’s contract, such as hours and the place of work. This could be a temporary or permanent change, and all changes must be agreed with the employee.
Temporary lay-offs
You can agree with employees that they will not work for a while. This is known as a temporary lay-off—and must be a short-term solution and not a permanent change to agreed working hours.
Move employees into other jobs
If your business needs have changed or you’ve restructured your business, you could move an employee into a different job role, with their agreement.
But remember, if you’re making any changes to an employee’s job, you must make sure you’re updating their employment contracts accordingly.
Before considering redundancy
If you’ve considered all other options first and none of them are possible, then you might have to consider making a redundancy. There might be a genuine redundancy situation if:
- You have to close your entire business.
- You have to close part of your business or a business in a particular location.
- Your business now needs fewer employees, or fewer employees with particular skills.
Redundancy can get complicated. That’s why it’s always best to seek legal advice and support before you start the redundancy process.
BrightHR is here to help
If redundancy is your only option, you need to make sure you do it in-line with the law. To help you get redundancy right, we’ve created a brand-new online tool to help make redundancy as straightforward and stress-free as possible.
The redundancy navigator tool includes:
- A planner to take you step-by-step through the whole redundancy process.
- A library of redundancy letter templates to help you stay compliant.
- Unlimited online storage, so you can store all your redundancy documents securely.
And if you’re feeling overwhelmed by complex redundancy processes? Our employment law experts are available 24/7 to answer all your redundancy questions. Call BrightAdvice on 0800 470 2432.