A client wants to know what their options are after the furlough scheme ends, for both furloughed staff and others.
On 29th May 2020, the Chancellor, Rishi Sunak, confirmed that the furlough scheme would wind down over the next few months, ending on 31st October 2020. Prior to this, it is advisable that your client prepare in advance for what they will do with staff once the scheme ends. They may wish to consider the following:
- utilising on the Job Retention Bonus
- retaining staff as normal
- seeking agreement with staff to reduce their hours
- implementing lay-off
- removing the use of paid overtime
- offering employees the chance to take a sabbatical
- redeploying staff across other areas of the business
- making staff redundant as a last resort.
To offer more guidance on the Job Retention Bonus (JRB), the Chancellor of the Exchequer, Rishi Sunak, released his ‘Plan for Jobs’ on 8th July 2020 to set out how the government will support economic recovery in the UK. One of the elements included was the JRB. It is being implemented to provide additional support to employers who retain their furloughed employees in meaningful employment after the Coronavirus Job Retention Scheme ends.
It is a one-off, taxable, payment of £1,000 for every furloughed employee retained who meet the criteria and can be claimed through the government website. If your client has furloughed many staff who meet the criteria, the bonus could total several thousands of pounds. All employers who furloughed staff are eligible for the JRB including recruitment agencies and umbrella companies, subject to availability.
Another option is laying staff off, which is usually considered as an alternative to avoid compulsory redundancies when there is a downturn in work or finance necessary to fund full-time employment. In practice, lay-off is where the employer asks their employees to stay at home and not attend work.
In light of the coronavirus outbreak, your client might want to consider laying off staff, otherwise known as a ‘temporary redundancy’, in order to manage a down-turn in workload. Rights available to staff in these situations will depend on whether employees have a ‘lay-off’ clause in their contract.
Where there is a contractual term entitling your client to do this, employees may then be placed on unpaid lay-off, not counting payment of statutory guarantee pay. In the absence of such as contractual clause, your client will need to agree this with staff, otherwise unpaid lay-off will breach the employees’ contracts of employment, entitling them to resign and potentially claim for constructive unfair dismissal at an employment tribunal.
Your client should ensure that they are keeping up to date with government updates in case there are other coronavirus initiatives announced to assist businesses with staff retention.
In association with Croner Taxwise
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