Are you ready for the end of furlough?

As I write this, the furlough scheme has just over a month to run. After that, the central support for businesses to retain staff through the Government paying up to 80 per cent of an employee’s salary will come to a stop.

This will be replaced by a different scheme, but it will be one that is more limited in scope and which effectively filters out those sectors that are likely to be most at risk as the country steels itself for the economic consequences of the Covid pandemic.

In crude terms, what that means is that if you or your business operate in a sector where physical footfall might be the difference between success and failure – the hospitality sector, which embraces restaurants, bars and events, is a good example here – you’re highly unlikely to qualify for continued help.

You can find out more about the Job Support Scheme and whether you meet – or are likely to meet – the criteria by reading the dedicated advice on the Government’s website here.

Current statistics suggest that there are now close to 700,000 fewer people on business payrolls than there were when the UK went into lockdown at the end of March. A good proportion are not expected to return to their place of work when furlough – or the Coronavirus Job Retention Scheme, to give it its full name – ends on October 31.

So where does that leave small and medium sized businesses who may not be able to support the same level of staffing from November as they have done to date.

The most important thing here is preparation. Obviously – and sadly, for many UK workers – redundancy is likely to be a definite option for businesses that are under the cosh financially and are looking to enter the winter in as lean a state as is possible.

As a rule of thumb, it takes around 5 weeks to run a redundancy process from start to finish, which means anyone reading this who’s considering making staff redundant but hasn’t yet set the wheels in motion is already facing a tight timetable.

The first piece of advice I would offer those business leaders who don’t have an internal HR team to support them would be to talk to a specialist consultancy service like Constantia to get the most up to date advice, guidance and help available.

Although this is a service that will incur a cost, getting solid advice that means you avoid making mistakes in how you treat your staff could well save you money in the longer term.

But if you really insist on going it alone without expert help and advice, here are the things you should be considering carefully:

1. Don’t be blinded by length of service

In a compulsory redundancy process, it’s generally true that the longer people have been working for you, the more expensive they are to make redundant, and the longer the notice you have to give them.

But it’s important to remember that the cost of your redundancy process isn’t the only factor you should be thinking about.

As I keep saying, you must always keep in mind the fact that when it comes to redundancy, it is the role that is being lost from the business, not the individual. So, whilst you may really prefer to see the back of Nigel in Accounts, if the business needs or wants to retain the job he does, you’re going to have to look somewhere else to trim your costs.

2. Play fair

Any redundancy process needs to be equitable, so make sure that whoever ends up being considered for redundancy, their experience matches that of everyone else in the process.

3. You need a good reason for putting people into a redundancy process

The moment you put someone up for redundancy without good reason is the moment at which you run the risk of being sued for discrimination or unfair/constructive dismissal.

There are several criteria which it is fair to use in selecting candidates for redundancy. These are:

·         skills, qualifications and aptitude

·         standard of work and/or performance

·         attendance

·         disciplinary record 

Length of service is also fair – for example, a ‘last in, first out’ process – but only if you can justify it in a way that keeps your process within the parameters of employment law.

 Unfair criteria for redundancy selection are reasonably well known and obvious, but they include:

·         all reasons relating to maternity

·         historic or current absences for family reasons, including parental leave, paternity leave (birth and adoption), adoption leave or time off for dependants

·         acting as an employee representative or trade union representative

·         joining or not joining a trade union

·         being a part-time or fixed-term employee

·         age, disability, gender reassignment, marriage and civil partnership, race, religion or belief, sex and sexual orientation

·         pay and working hours, including the Working Time Regulations, annual leave and the National Minimum Wage

4. Communicate

You should always consult with employees before and during any redundancy process in order to offer them the maximum time available to prepare for and engage with the process – and remember that anything you offer to one candidate should also be offered to any others.

5. Do it right rather than fast

It’s better to take your time and get a redundancy process right than to hurry it and get it wrong. That may end up costing a little more in additional salary payments you’d rather not have to make, but it will give you the peace of mind of knowing there’s less chance of finding yourself on the end of a wrongful dismissal claim.

As I said earlier, getting expert advice from an experienced HR professional will always put you in a much stronger and better informed position, ensuring not only you, but also your employees, benefit from an efficient, fair and well-run process.

If you’d like to find out how Constantia Consulting can help you to navigate the end of the furlough scheme, why not get in touch for an informal and confidential conversation and see how we can bring value to the long-term future of your business.