As the Government’s furlough scheme ends, we asked Womble Bond Dickinson to look at the next steps


How many jobs have been saved by the furlough scheme?

We won’t ever know the answer to that question but 11.6 million jobs have been supported by the scheme at some point. That equates to roughly 40% of the total UK workforce. There is no doubt that, without the scheme, many thousands of employees would have lost their jobs. Anecdotally, within the employment team at Womble Bond Dickinson we have seen far fewer redundancies than we expected at the beginning of the pandemic.

As at 31 July this year – the latest date we have figures for – approximately 1.6 million employees were still on furlough, employed by around 25% of employers. Assuming those employees are still furloughed, a quarter of all employers will now be considering what to do when the scheme ends.

According to the latest HMRC guidance on the scheme, employers have three choices when the Government ends the scheme:

Bring employees back to work on their agreed terms and conditions; Agree any changes to terms and conditions of employment with employees; Terminate their employment.

HMRC notes that, when employers are making decisions about how and when to end furlough arrangements, equality and discrimination laws will apply in the usual way and normal redundancy rules apply to furloughed employees.

Employees could have been out of the business for anything up to 18 months, and going back to work from furlough will be similar to returning from maternity leave or a long period of sickness absence. Where employers stayed in touch with staff and provided support, employees will find it easier to come back. However, employers should consider what assistance employees will need when they start work again and a mini-induction may be required to ensure they are up to speed with changes in the organisation and any new IT. It is important that employers do not treat employees differently in future because of their period of furlough, eg in relation to promotion, discretionary bonuses or redundancy, as this could lead to claims for discrimination and unfair dismissal.

Employers must not impose changes to terms and conditions (eg reducing salary or hours of work) unless they have the contractual right to do so, as it can result in claims for breach of contract, deductions from wages and unfair or constructive dismissal. They need to consult with staff and agree the changes with them. Collective consultation with trade union or elected representatives may be required if 20 or more employees are affected by the proposed changes.

“Fire and rehire” has been in the news recently as a tactic for changing terms and conditions but this can be risky and employers should take advice before going down this route.

If redundancies are necessary, they must be for a genuine reason and there are strict rules in place regarding the procedure that an employer has to follow, in order to avoid claims for unfair dismissal. This includes consultation with the affected individuals and with trade union or elected representatives if 20 or more redundancies are proposed, getting the pool for selection right, agreeing the selection criteria, considering alternative employment and offering an appeal.

In previous recessions, employers were quick to save costs by making redundancies, then found it challenging to recruit the staff they needed when the economy improved. We currently have a competitive jobs market, with around one million vacancies and staffing shortages in various industries. Employers may find it difficult to recruit in the future if they make redundancies now.

KAREN PLUMBLEY-JONES, Managing Associate (Practice Development Lawyer), Womble Bond Dickinson