The F Word: What you need to know about ending furlough

Whilst some parts of the supply chain have been busier than ever, other businesses have had to take the step of placing employees on furlough leave as part of the government job retention scheme. Some organisations have been hit harder still, and are looking at restructure or potential redundancies.

With many logistics employers now looking to bring employees back into the workplace or move ahead with restructuring plans, during our recent Talent in Logistics podcast we asked Partner and Employment Solicitor Maria Gallucci of Woodfines Solicitors for some guidance around ending furlough, plus advice for those considering redundancies.

Can you give us some guidance around the work retention scheme?

Maria Gallucci: Essentially, the government job retention scheme enabled employers to place employees on furlough leave for a period of time, and for a minimum three week period, and they were entitled to a grant from the government which covered 80% of wages. With the scheme, employers can choose whether to pay just the 80% or whether to top it up to 100% of wages. 

As an employer, when placing somebody on furlough leave, you have to inform them formally in writing. You must make sure you have their consent as you are temporarily changing the terms of their employment. 

What changes for employers from July?

MG: We are now coming to a point where the government is reducing the scheme and essentially getting those employees back into the workplace. So, from July it will be possible to bring furloughed employees back into the workplace full or part-time – before now it was very strict in that employees could not work for that employer at all. Over a period of time leading up to October, the government grant will slowly be reduced.

What are the rules around ending furlough?

MG: It’s a good point now for employers to start thinking about how they’re going to manage, reduce or end that furlough leave. Are they are going to reduce it step by step, by bringing people back part time? Or is there going to be a point where they just end it?

There is no set procedure for ending furlough. It depends on whether the agreement put in place by the employer when they put their employees on furlough refers to a process for ending furlough. For example, any notice that should be given. If no period of notice was specified, the employer should aim to give reasonable notice anyway, and this should be given in writing. There’s quite a lot of guidance on the ACAS website, and they have produced a template letter to notify employees of the end of furlough that may help employers.

What do employers need to communicate to employees when furlough ends?

MG: There are no real legalities, around ending furlough. However, for employee relations, employers should ensure that employees know that the workplace is a safe place to return to and they are going to be paid full pay, or whether there have been any salary reductions. Salary reductions have to be agreed because they’re a change to employment terms.

Employees will also want information around any working arrangements. For instance, is there is any possibility of flexible working? Or will the employer provide parking so that they can drive to work if they used to commute on public transport? They’ll also want some reassurance around their annual leave entitlement as well.

Of course, the guidance is still for employees to continue to work from home where they can at the moment. So if employers are thinking about bringing back furloughed employees at the moment, it might not necessarily be back into the usual workplace. For some, it may be a good transition for returning employees to work from home initially, before they fully go back into the workplace. 

What guidance would you give to organisations that might need to restructure and make people redundant?  

Employers should consider very carefully if there are any ways to avoid redundancies – can they reduce costs in other ways? Perhaps they can limit or stop overtime? What salary reductions or reduced recruitment? Is redundancy the only option? 

However, if they come to the conclusion that redundancies are unavoidable, then they’re under an obligation to follow a fair procedure, which includes fairly selecting employees for redundancy and also consulting with them.

When considering large-scale redundancies, essentially over 20 employees, a minimum consultation period applies. So, employers need to be mindful of that. ACAS has some useful guidance that is worth looking at on their website which talks through what the redundancy process looks like.

It includes warning employees about redundancies, and then consulting with them as well. Then there is fair selection, where they’ll have to think about whether they do a scoring process for selecting employees, and what kind of criteria they look at for that scoring process.

Learn more about returning to the workplace post-lockdown

From annual leave entitlements, Covid-19 testing rules and relevant employment law, you can learn more about what employers need to know as employees return to work in our wellbeing focused podcast where we interview Woodfines SolicitorsListen now or download from your usual podcast platform.