07/09/2020

Six of the best alternatives to redundancy as furlough winds down

Lisa Kemp

Many businesses may consider making redundancies as the government’s furlough scheme winds down, but Thursfields Solicitors has highlighted various less draconian options.

Lisa Kemp, an associate director in the Employment department at Thursfields says these measures could enable companies to retain valuable members of staff during the difficult economic period ahead, rather than losing them.

The Coronavirus Job Retention Scheme (‘CJRS’), which began in March, has paid 80% of furloughed workers’ salaries up to a maximum of £2,500 a month until the end of August, with employers having to make rising contributions in September and October before it ends.

This has led to the National Institute of Economic and Social Research warning that ending the CJRS could send unemployment rates soaring above 10%.

However, Lisa has highlighted six alternatives that businesses should at least consider.

Lisa said: “While redundancy dismissals may be inevitable for some businesses, making sure you think through other potential courses of action first is always an essential part of a fair redundancy process.

“This is especially important at the current time when everyone is adapting to all sorts of change in their lives, and that may mean employees are more willing to accept an employer’s proposals as a way to avoid their dismissal.”

Employment Law Advice

Lisa said that six of the best options to consider were:

  1. Continuing to furlough staff with reduced terms once the CJRS ends. “The CJRS essentially created a form of agreed leave and that means it may be possible to extend the furlough period provided employees agree, although employers will not be able to reclaim wage costs after October.”
  2. Agreeing an unpaid career break or sabbatical.  “It may suit an employee’s personal circumstances to agree an unpaid break from work. Typically the employment contract would be kept alive meaning the employee would continue to accrue annual leave, and their continuous service would also be preserved.”
  3. Lay employees off temporarily without pay. “To impose this, employers must either have the contractual right to lay-off, or consult with staff to obtain their consent to being laid off.  It is important to note that employees laid off for four or more consecutive weeks, or for six weeks in any 13-week period, have the statutory right to resign and claim statutory redundancy.” 
  4. Implement short-time working. “Once again, a contractual right is required to impose short-time working, or consultation and the agreement of employees will be required. And as with lay off, employees can apply for statutory redundancy.”
  5. Reduce hours and pay. “In order to keep their job, employees may be prepared to agree to a reduction to their working hours and pay, particularly if that suits their own circumstances.  Consultation with employees is required to reach an agreement which would need to be clearly documented.”
  6. Allow employees to work elsewhere. “It may be possible to agree a period of unpaid leave with employees and vary their employment contracts to allow them to work elsewhere on a temporary basis.”

Lisa also points out that employers who bring workers back from furlough and retain them in employment until the end of January 2021 will qualify for a £1,000 bonus.

She added: “This is a difficult time for businesses that have had to furlough workers, and it’s important for them to know that there are options available other than redundancy.  However, they should seek advice to make sure they choose the best ones and implement them correctly.”

Businesses who need employment advice can email Lisa Kemp at LKemp@thursfields.co.uk or call her on 01905 677 073.

Lisa Kemp

Lisa Kemp,

Associate Director, Employment & HR Law

Share this news story

By using this website you agree to accept our Privacy Policy and Terms & Conditions