Redundancy Support Packages, & end of Job Retention Scheme
With the end of the Coronavirus Job Retention Scheme (CJRS) looming, all employers are continuing to think about the future of their business despite the on-going uncertainty ahead.
As a result of this uncertainty, many are faced with the question of what will happen when the CJRS comes to an end.
When will the Coronavirus Job Retention Scheme come to end?
- The Coronavirus Job Retention Scheme has been extended until 31 October, but began winding down from the start of August with government contributions reducing gradually. You can find out more about the key dates to be aware of in our CJRS Key Dates Guide.
- The scheme has been utilised extensively by employers, with the government previously reporting that nearly a quarter of UK workers have been placed on furlough since the scheme began on 20 April 2020.
- There has been no indication that the scheme would be extended again past the deadline of 31 October, despite calls from several employment bodies to do so. In our opinion it is very unlikely that any further, high-level government support can be sustained as the cost of government spending is estimated to be in the region of £80bn by the time the scheme is brought to an end in October.
Themes and Trends – what our clients are asking:
- The hot topic for our clients has been in regards to the redundancy process and applying this in practice to their business. This is unsurprising when considering that, despite the inception of this unprecedented government support, between March and July 2020:
- The number of employees registered to companies’ payroll fell by 730,000, which is the largest quarterly drop since 2009.
- There was a 116.8% increase in the number of people claiming unemployment benefits according to the Office for National Statistics.Redundancies have increased dramatically when compared with statistics with previous years.
- ACAS have released figures stating that redundancy-related calls shot up by 160% over the past two months when compared to the same period in 2019.
- However, it’s not just small business that are finding the current climate challenging. Several major employers have recently announced large-scale redundancy plans, including Hays Travel, HSBC, M&S and WH Smith.
- It is also likely that the number of people who have been out of work throughout the pandemic has been masked somewhat by the CJRS. Therefore, with the scheme coming to an end, this trend is only set to continue as the economy has been impacted dramatically by the pandemic.
- Despite this, themes have also emerged from the return to work as many employers have brought employees back from furlough leave, on a flexible or full time basis. Issues have arisen with employees taking annual leave amidst changing travel restrictions and establishing safe working practices in line with government guidance.
- Companies should make use of the time where the CJRS remains active and also the Job Retention Bonus, which the government have proposed as an incentive to encourage employers to bring employees back from furlough. However, this should not be relied upon as the contribution is minimal and therefore, should not delay employers from making difficult decisions.
- We would strongly encourage employers to consider any alternatives to redundancy such as more flexible ways of working, temporary lay-off, short-time working, or job shares. Redundancy should always be a last resort and only used after other options have been exhausted. Innovative thinking will be required to cut costs and ensure companies can remain profitable in a post-coronavirus business environment. You can learn more about some of the potential alternatives to redundancy by accessing our guidance note.
- The lack of certainty and worry about job-security is likely to have a significant impact on the mental wellbeing of your workforce and therefore it will be important to be aware of this and ensure steps can be taken to support staff where possible. This will impact their effectiveness and therefore, we would encourage you to take the time to engage with staff, and communicate regularly and effectively. Our mental health and wellbeing guidance notes contain useful tips on the best way to manage these issues and can be downloaded here.
- Should you find yourself in the unpleasant situation where permanent redundancies need to be made, then there is no need to face this matter alone. The most important thing will be to seek appropriate advice and ensure that meet your legal obligations, as unfair dismissal claims linked to redundancies are one of the most common claims made at employment tribunal. The first step in the process will be to establish a clear business rationale and we would encourage you to take the time at the start of the process to think through your reasoning carefully, as this will help in making the rest of the process run as smoothly as possible. You can download our guide to redundancy and restructures here.
How can French Duncan HR Services support your organisation?
We recognise the current situation is extremely challenging for businesses and also that redundancy is a complex area of employment law. There are many considerations for you as an employer in terms of managing your employees’ return to work, or making difficult decisions about the future of your business. If you would like further support you can download details of our Redundancy Support Packages here or below, and we are always willing to discuss tailored options to suit your business.