Announcing the extension of the furlough scheme will have provided many businesses and employees with some comfort and further financial breathing space during these challenging times. The scheme will remain in place until 31 October 2020, which is perhaps longer than initially anticipated. The scheme’s current format will however change from August with employers being required to share the cost of furloughed staff with the government.
By the end of May more detail about the post-July changes will be published. Although the aim of the changes will be to provide employers with greater flexibility to get furloughed employees back to work on a part-time basis, without the full detail of the changes, the real benefit cannot be assessed. So there will be some nervousness until the employer’s contribution has been published.
Most employers supported by the furlough scheme will sensibly defer any definite decisions about the future shape of the workforce and their return to work plans until further information is available. In the meantime, there are certain key questions that need to be answered.
Can the business return to the way it was in the short and long-term from both a financial and operational perspective and if so, how quickly can this be achieved, if at all?
Even when driven by financial necessity, furloughing employees will have been a difficult decision but in many cases it would have been implemented overnight. Bringing the operation back to life and having sufficient revenue streams to support this move is likely to be a more complex process; a new strategy may be required. Where people are at the core of the operation, workforce planning will be an critical part of developing a new strategy, which may inevitably involve restructuring and redundancies. Changes to contractual terms and conditions of employment may also be necessary. In either case, careful planning will ensure that all legal obligations, including complying with any consultation requirements are satisfied to minimise the risk of claims in the employment tribunal.
How will employees’ expectations be managed?
Until the recent announcement, the focus has been on the furlough scheme ending at the end of June. In contrast to the suggestion furlough is addictive, the majority of those furloughed will have been focusing on returning to work on 1 July, which is probably what individuals believed they were signing up to under their furlough agreements. Financial reasons will be at the heart of the decision for any business to utilise the scheme for as long as possible. In making this decision, employers need to be able to address employees’ current expectations, not only in terms of a continued requirement to remain at home but also the financial impact that it may have on them personally. A clearly communicated rationale and a keeping in touch plan will be essential to retain the engagement of those on long-term furlough, if those employees are key to future business success once the recovery period is underway.
The consequence of long-term furlough means that employees are being asked to agree to a continued variation of their contracts of employment. If furlough is to be extended it will be important to establish if current furlough agreements can be relied upon or whether new agreements will need to be issued to avoid breach of contract and wage claims.
Are there any health considerations that need to be addressed in the return to work plan?
There is still no certainty about the curtailment of the virus and the health risks are still present. Any return to work plan must be supported by a thorough health risk assessment. The assessment needs to start from an employee’s home and include their journey to and from work. It is difficult to control who individuals come into contact with when away from work. Control measures will need to be implemented, including reiterating the importance of following the government’s social distancing measures and good hygiene. Further hard work will be needed once the employee is back at work to manage any health risks, with adequate controls being implemented. Adhering to government and the Health and Safety Executive guidance should be non-negotiable from the perspective of both the business and all employees when it comes to protecting individual well-being. Vigilance and flexibility in relation to control measures will be important to safeguard health, if the level of risk increases. The workplace is likely to feel and may look very different when employees return. It is important that clear guidance and training is provided on how to work safely and protect health.
Mental health should also be a factor that is considered as part of any risk assessment. This factor is multi-faceted. Some employees may need reassurance as they have concerns about their personal safety. Others may struggle to adapt when returning, particularly if the work regime feels unfamiliar. Deferring a return to work or making a request that homeworking is undertaken, may leave individuals feeling left behind and isolated. Employers have a legal duty to tackle work-related mental health issues; risks need to be assessed and controlled.
How will a phased return to work be managed?
Roles and skills will have been identified as necessary to support the initial recovery phase, while less business critical roles are likely to be kept under review as progress is made. Resuming some level of operation will be perceived as a positive step but there are potential legal risks that need to be addressed.
A phased return means that choices will have to be made about who returns, and from August whether this is on a full-time or part-time basis (if home working cannot continue), and who stays at home furloughed. Employment law still applies irrespective. To avoid any legal challenge, employers need to be transparent about the selection criteria adopted to bring people back to work while others remain at home. It is essential that this process is documented, and the audit trail must be capable of demonstrating that selection is fair, based legitimate business reasons and is not discriminatory.
Is business ready to be scrutinised?
The government’s focus is now on a transition period, with employers starting to take back responsibility for the cost of their workforce. In the absence of further detail, it is unclear if employers will be required to justify decisions made to retain employees on furlough until the end of October. Employers may be required to justify their decisions made about keeping employees on furlough throughout the extended period. The furlough scheme is not there to avoid dealing with problem employees. At some point concerns will have to be addressed.
The furlough scheme extension will continue to protect many jobs as the economy recovers. While waiting to learn more about the changes to the scheme from August, from an employment law and people management perspective employers should now start to sketch out the future for its operations and the workforce.
FG Solicitors are experts in all areas of Employment Law and HR, and we can slide your business through the business recover stages. Feel free to call us on 0808 1729 322 for a no obligation discussions.
This publication is for general guidance only. Advice should be taken in relation to a particular set of circumstances.