What next for UK businesses as furlough scheme reaches its last stages?

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With the furlough scheme reaching its later stages, we spoke to two employment experts – Anna Elliott and Julian Hemming from international law firm Osborne Clarke – to look at what this will mean for the UK’s business leaders and their staff.

THE FURLOUGH SCHEME WILL BE REMEMBERED FOR YEARS TO COME AS A NOBLE INTERVENTION BY GOVERNMENT, BUT TO WHAT EXTENT HAS IT MASKED FUTURE UNEMPLOYMENT FIGURES?

Anna Elliott: “The UK scheme has been rightly lauded as it is helping employers to retain staff, but there is still a high risk if companies do not recover, in some instances, it has provided a temporary band aid.

“But you have to say that, overall, it has been a positive measure, as it has allowed businesses to take stock and look after many staff during this difficult time.

“It started in March and was initially due to run until the end of May, and it was then extended again until the end of June and now again until the end of October, with government support set to be phased out from August.

From November 1, employers will need to pay 100% of the cost and that will be the telling time for many businesses, although the Chancellor’s announcement on July 8 of a new ‘job retention bonus’ of £1,000 to be paid for each furloughed employee brought back to work, and where they continue to be employed as of January 31 2021, will help. The employee must be paid at least £520 on average each month from the end of the Coronavirus Job Retention Scheme (CJRS) through to January 31. Further details will be announced by the end of July.

When looking at returning to work, what are the key challenges that employers need to consider?

Julian Hemming: “Many employers are looking at bringing people back from furlough and they are looking at doing so in a staged way. ‘Who do we need back and when do we need them?’, is a common question being asked.

“Businesses need to consider if their environment is ready and they still need to consider that employees need to work from home if possible. This applies to furloughed staff too – as returning to work may not mean that they are coming back into the office.

“Considering this – are they set up to work from home? What did you say to them when you furloughed them? Did you say that you will bring them back on seven days’ notice, for example?

“If you haven’t put any timetable in place you need to have an individual consultation with them, as their circumstances might not be right for coming back. They might be shielding, for example.”

Anna Elliott: “Health and safety legislation needs to underpin everything about bringing employees back into work. You will need to consult with employees and undergo health and risk assessments to find out if they can work from home, or in an office environment.

“If you’re bringing people back into the office, it will be worth considering staggering start and finish times and rotas.

“Important to all of this is employee engagement. You can ensure best practice here by talking with employees throughout the process and being aware of the unique environment that is facing everybody.”

How can you retain culture through remote working and when you come back into an office?

Anna Elliott: “It is important to think about how you want to be viewed as an employer. There is an expectation from staff around being open and transparent. Good employee relations and communications will be critical to maintain culture.

“There are lots of things employers are doing to stay in touch with their staff, ranging from pastoral support as well as more fun and collaborative things; and these both help to build culture.

“Having employee forums to share ideas to say what is working and what’s not is also a good thing to do.”

Julian Hemming: “During this time there is an underlying stress and it is important for employers to recognise that and be extra sensitive to employee issues that might arise. It is also important to ensure your management team is trained adequately as we’re facing new challenges. 

“HR departments needs to really step up, as there is a chance for people to feel excluded if you do not and that can be a downward spiral.”

The CEO of Twitter, Jack Dorsey, made a public statement that all staff could work from home forever now. Do you think many more businesses will follow?

Julian Hemming: “For us and our clients, it is a mixed bag. For some businesses, working from home won’t be possible. A manufacturing business, for instance, will need its employees to be in the factory that makes the goods, but what we’re seeing with office-based companies is a consideration of who can work from home and a new thinking around what  that will look like.

“Other clients are recognising that this may not be an option as their employees don’t have the right environment to work from home in; they might be sharing a flat or have a number of scenarios in their lives that make this impossible.

“I would also say that most people are missing those little interactions that we used to have every day that we did not really think about in the past – on the stairs or by the coffee machine – building that spirit of a business still needs to happen in the workplace. Many businesses are heavily invested in real estate too, so this needs to be considered. 

“I think lots of people still like that separation between work and home.”

When making staff redundant, is there anything that businesses need to consider that may be new or unique to the crisis?

Anna Elliott: “Normal employment laws apply, and you need to still show you have a fair reason for dismissal and have gone through a fair and due process. The current climate will be temporary, so you need to think about the long-term and ask yourself – do you have robust reasons that you cannot support the employee?

“Leaders must also remember employees that have two or more years’ service have the reason to not be unfairly dismissed.

“Entitlements around statutory redundancy still also remain and there has also been confusion around using furlough to pay employees their redundancy pay.

“I would advise employers look at this because HMRC has also put a structure in place now where it can claw back the money that has been used improperly.

“Voluntary and early retirement and extended holiday are options to retain talent, but also protect the business and its costs during this time; and should be looked at before redundancies are made.

Julian Hemming: “For me, it is not just about picking on the furloughed people if you are making redundancies. You need to look at your whole workforce and consider what is the best thing for the business and its employees.”

What is the reduced threshold for employee consultations and why is it important?

Julian Hemming: “It is under the radar of many businesses, but the government is keen that employees inform and consult with their employees. If you do not have a mechanism to consult and inform with your employees, you should really think about putting one in place.

“On April 6 this year, the government reduced the threshold required for employees to set up consultation arrangements. It used to be 10% but now it is just 2% of the workforce that is required to force a consultation.

“Those arrangements can be requested in businesses between 15 and 2,000 employees. The question for business leaders is; do you want to have an employee consultation imposed on you due to legal requirements, or do you want to put in place your own arrangements?

“It is much better to put something in place that fits your business and arrangements and shows you’re taking a lead on the subject.”

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