As we know, the Government scheme was initially implemented for a 3-month period from 1st March 2020, and the Government has said that this “may” be extended, but this obviously comes with no guarantees.
If a business still doesn’t need an employee to return to work when the scheme ends, they should firstly assess whether they have a Lay Off clause within their contracts. If they have, they can lay employees off and the employee can claim a guarantee payment from the Government, a maximum of £29 a day for 5 days in any 3-month period. But employers beware, employees placed on lay off for 4 or more weeks in a row, or 6 or more weeks in a 13-week period can claim redundancy from the Company.
If there is no Lay Off clause within the contract, the employer will need to obtain the employee’s express agreement to reduce their hours/pay as otherwise this will be a breach of their contact which could give them the opportunity to claim constructive dismissal.
Unfortunately, the business may have no alternative but to make redundancies but will still have to ensure that a fair process is followed. Also, those looking to make 20 or more of their employees redundant will have to comply with collective consultation rules.
It is unclear yet whether social distancing may still be in place when the Furlough Scheme ends which could cause a further headache for businesses considering how to carry out redundancy consultations, especially if their businesses have not yet reopened.
For further information on furloughing or laying off employees or the worst-case scenario, redundancies, please do not hesitate to contact us on 01792 234761 or email firstname.lastname@example.org