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End of the Covid-19 Furlough Scheme and the Impact on Business

The Coronavirus Job Retention Scheme (“CJRS”) set up earlier in 2020 will be wound down by the Chancellor by October 2020.  From 1st July 2020, employers have been able to implement flexible furlough arrangements including part-time arrangements.  The rules of the CJRS state that the employer must however keep a new written agreement to record this variation to the terms of employment for each employee.  It also requires the employer to pay the employees their salary for all full hours worked.  The cap is still at present limited to £2,500.00.

Employers will also have to pay Employer National Insurance and Employer Pension contributions with effect from 1st August 2020.  From 1st September 2020, employers will have to also pay 10% of wages with CJRS paying 70% for those employees who are still furloughed.

For those employers who are struggling to sustain pre-Covid business levels the ending of the CJRS could have a huge impact on maintaining their existing workforce.  The advice is that every employer must review its business plan, establish which parts of the business is economically viable post CJRS, communicate and consult with its staff and inform them whether or not there will be redundancies or whether or not there will be a reduction to hours worked where there is reduced business levels.  Many who have not already begun a redundancy process will not be contemplating their options where the business has little prospect of improving.  If you need any legal advice in commencing a redundancy process please contact us and we will be able to offer practical and sensible advice to make sure you avoid any pitfalls.

Since 1st August 2020, individuals classified as being clinically vulnerable or clinically extremely vulnerable who have been shielding will be able to return to the workplace if they cannot work from home.  As a business, you need to know what are the legal requirements placed on an employer to ensure that this category of vulnerable people is safe in the workplace and to avoid the risk of any claims under employment law.  Firstly, from 1st August 2020, Statutory Sick Pay no longer applies to shielding workers.  Those shielding can remain on furlough beyond August 2020 or can even be re-furloughed under the CJRS if they have previously been furloughed for a full three-week period before 30th June 2020.

Where this category of vulnerable individuals is to return to the workplace, and employer would be prudent to undertake a full risk assessment.  The questions to ask are:

  • What reasonable adjustments do you need to make?
  • What is the cost of this on the business?
  • Is there any other solution to bringing this particular individual back to the workplace?

For employers, failure to make the right decision could potentially lead to claims for discrimination, breach of Health & Safety legislation, potential whistle-blowing claims and so forth.

If you need any help or advice to avoid these pitfalls then please contact Simonne McIvor on 01279 818280 or click here to send an email.  We are here to help.