The Final Month of Furlough: How to Prepare Your Business

After a full year and a half, the Coronavirus Job Retention Scheme, or what's become universally known as furlough, ends this month on 30th September.

While around three million people are now back to work, there remain many businesses that are just starting to resume normality.

Many more companies have been taking advantage of flexible furlough, where staff work part-time and are on furlough pay for the remainder, which will also cease.

In this guide, the SAS team summaries the key steps for employers to ensure they are equipped for the transition, whether returning to pre-pandemic working systems or adjusting their teams for the long term.

Welcoming Staff Back to Work After Furlough

If your business is taking back all staff on the same conditions as before furlough began, you'll need to be mindful of your cash flow.

Although companies have been contributing increasing proportions of the cost of furlough pay, your salary expenses will revert to 100% of your staffing costs.

Final grant claims must be submitted by 14th October, with any amendments entered by 28th October latest, and the grant will pay 60% of wages capped at £1,875 per employee.

The steps to follow include assessing your furlough agreements to determine how the return to work process will run.

If you don't have any provisions, it's best to discuss this with employees, ensuring they have sufficient notice that their leave ends and when they are expected back in the typical work environment.

Recommended actions include:

  • Holding return to work briefings, as you would for a team member after long-term sickness absence.
  • Revisiting your workplace policies and procedures to bring staff up to date.
  • Running through any changes to health and safety protocols and site risk assessments.
  • Ensuring any reasonable adjustments have been made for disabled employees or staff whose circumstances may have changed during the pandemic.

After a considerable time away from work, some staff may require additional support to deal with the adjustment.

Refresher induction sessions, updated training, or gradual returns to duties are great ways to support your staff as they adjust.

Making Changes to Work Conditions Post-Pandemic

Welcoming staff back on the same basis as their existing work contract is ideal. Unfortunately, this won't be possible for every business.

Some employers are faced with the need to reduce payroll costs due to the impact of the Coronavirus crisis on their trade, and maybe looking at options including redundancies or reducing hours.

Here are some essential considerations before making any decisions.

  • Any changes to employment conditions, such as reducing hours, or offering lower pay rates, must be agreed upon in writing between the employee and the employer.
  • Changing work contracts without consent can result in a breach of contract claim. Failure to terminate a contract without notice may constitute wrongful dismissal.
  • Suppose you are anticipating pay reductions to avoid redundancy. In that case, it's essential to consult with staff first to encourage a dialogue about the different options and what it means for each team member.
  • Unpaid or part-paid leave is another alternative, although this must be voluntary and agreed upon in writing.

If you intend to extend furlough, you can do so but will need to cover the costs without the financial assistance of the government grant.

This action will require employee agreement.

As with every other employment change, businesses must confirm the terms and agreements in writing.

Dealing With Redundancies for Staff on Furlough

In some cases, bringing staff back even on reduced hours may not be possible, and many businesses are considering redundancies to scale back operations.

At the end of 2020, redundancies reached record levels, which will likely increase with the end of the furlough scheme.

Furloughed employees can be made redundant, but note that:

  • Furlough grants cannot be used towards redundancy payments.
  • The standard employment law applies, requiring fair procedures and employee consultations.
  • Employers should calculate redundancy pay against pre-furlough salaries, not against the 80% reduced wage paid during furlough.
  • Notice periods apply as usual, but businesses cannot claim furlough grants for employees serving out a notice period.
  • Staff cannot be selected for redundancy based on being on leave - the selection pool should always be based on similar roles or lines of work.
  • There may be practicalities to consider if employees are on furlough and in a redundancy situation, such as holding meetings virtually.

We hope these summaries help your business prepare for the transition ahead, whether you're able to invite all staff back to work or need to make adjustments to your staffing structure.

If you have any questions about submitting your final furlough claims or dealing with budgeting for the change in salary costs, please get in touch with the SAS Accountancy team for friendly, jargon-free advice.


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