Legal advice: Difficult decisions facing employers as furlough scheme ends

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Natasha Moore of Woodfines Solicitors

With the Coronavirus Job Retention Scheme drawing to a close at the end of September, many employers are facing some difficult decisions, writes Natasha Moore of Woodfines Solicitors.

The scheme, introduced in March 2020, will officially come to an end on 30 September 2021 has seen 11.6 million workers have a portion of their wages paid through the programme.

The latest figures showed that 1.6 million were still furloughed at the end of July. Although this is the lowest level since the start of the pandemic, it is estimated that up to one million people could still be on furlough when the scheme expires.

The end of the scheme presents several challenges for employers. Employees who have been off work may require assistance reintegrating into the company and resuming their responsibilities, while difficult decisions on redundancies may be unavoidable.

The end of furlough

Employers will need to ensure all furlough loose ends are tied up. The deadline to claim for furlough days in September is 14 October, while any amendments will need to be made by 28 October.

On tax calculations, HMRC advises businesses, ‘Payments you’ve received under the scheme are to offset the deductible revenue costs of your employees. You must include them as income when you calculate your taxable profits for Income Tax and Corporation Tax purposes.’

Welcoming workers back

Companies welcoming employees back from furlough might need to make arrangements for their gradual reintegration into the workplace. Employees who have been absent may require training, which may involve being brought up to speed on any processes that have changed, including new COVID-19 protocols.

Employers might also need to organise the safe return of workers to the office or expand remote working capacities. Those favouring an in-person approach have been warned by the Equality and Human Rights Commission and the Chartered Institute of Personnel and Development, that so-called ‘no jab, no job’ policies are likely to be unlawful as they might discriminate on the basis of disability, or religious or philosophical belief.

A chance to be flexible

If a full return to work (remote or physical) for all previously furloughed employees is not possible, employers could look at other solutions to avoid redundancies. One option is to ask employees to reduce their hours or take unpaid or part-paid leave.

Employers should be attentive to the needs of employees and prepared to make reasonable adjustments. Employee wellbeing, including mental health, financial health and wellbeing, will also need to be considered.

Last resort

Sadly, the end of the Job Retention Scheme will inevitably mean some businesses cannot afford to take all of their workers back. Employers with no alternative but to make staff redundant will need to ensure that they follow the redundancy process correctly.

The government states, ‘When employers are making decisions about how and when to end furlough arrangements, equality and discrimination laws will apply in the usual way.’

Here to advise

Employers should not delay in deciding their next steps. It is important to start talking to staff as soon as possible.

We are here to advise you at this complicated time. So, if you need help, call us on 0344 967 2505 or email employmentlaw@woodfines.co.uk

by Natasha Moore
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