Furlough Scheme Ends Today

Authors: Gary Smith (Partner, Employment Team) and Kimberley Wallace (Senior HR Consultant, Nockolds HR)

The government’s furlough scheme is to end today, 30 September, after 18 months and approximately £70bn.  Since it was created at the start of the first lockdown in March 2020 more than 11.5 million people have been placed on the scheme which paid staff 80% of their salary up to a statutory cap.  Today is officially the last day that employers can claim financial support through the scheme to pay staff who are not working due to the pandemic.

Of all of the government’s pandemic policies the furlough scheme has undoubtedly been one of the most successful in it’s primary aim of keeping people in employment throughout lockdown. Although there have been plenty of reports of ‘furlough fraud’ the speed with which it was rolled out and the flexible way it has been implemented across multiple lockdowns has provided a lifeline for hard pressed businesses and their employees.

As you may expect, the number of people on the scheme has declined since the restrictions have eased and businesses return to normal over the last few months. However, there are still between 800,000 – 900,000 people on the scheme in some form, either on full time furlough or flexi-furlough.

What will happen next?

There will be some employers that will need to take steps to address the end of the furlough scheme. Sadly not all businesses will be able to accommodate the return of all their furloughed staff, mainly due to the impact that the pandemic may have had on reducing their business’ activity. Therefore, its anticipated that many employers will be making redundancies, or reorganising their structures/processes/workloads to accommodate the end of the scheme.

You may well anticipate there to subsequently be a significant increase in unemployment rates following the end of the scheme. However, given that there are a record number of vacancies in the labour market at present (over 1 million), and because many employers are struggling to recruit, it may not be as disastrous as you could first think. 

What steps should I take for my business?

If staff are returning from furlough:

  • Support your staff who are returning to work from furlough – re-induct them to the work place as they may have been off work for a significant period of time. Retrain them on any systems or processes required for their job. Bring them up to date with company news and any changes

If you’re unsure if your business can accommodate the return of all furloughed staff:

  • Consider other options before making possible redundancies – such as the reorganisation of workload, restructuring teams/departments, redeploying staff into other roles or vacancies, restructuring processes, altering hours, pay cuts, consider career breaks, etc

If your business needs to make redundancies:

  • If this is the only option remaining then you must engage affected employees in a fair process in accordance with your redundancy policy
  • Obtain professional HR advice to mitigate risks associated with the redundancy process

Our Employment Team and Nockolds HR are on hand to discuss furlough or the end of the scheme and what this means for you or your business.

For more information and to find out how we can help you, please contact us on 0345 646 0406 or fill in our online enquiry form and a member of our Team will be in touch.