What are the alternatives to Furloughing employees?
The Government provided an update recently on employees qualifying for Furlough. Originally, employees had to be set up on payroll before 28th February, 2020. This has now been extended to 19th March, 2020.
If you have employees that were employed after this date, you may wish to look at other options. Firstly, is there still work for the employee? If there is, then you may need to keep them employed and in attendance of work. If the work has slowed down a little, you may want to look at putting them on short-time working or as a last resort laying them off temporarily.
Short-time working – Reducing employee’s working hours, therefore reducing their pay.
Laying off – Sending employees home for a temporary period.
Either option is a change to their employment contracts, and therefore you would need to either have it expressed in their contract or reach an agreement. You may be able to do it if it’s custom and practice in the workplace, or there’s an agreement with the trade union. But these should be considered as a last resort.
Employers could look at agreeing employees to take holiday, work from home, work more flexibly or take some unpaid leave to avoid this in the first instance.
Changing the terms of the employment contract
Employees can agree with the employer to make a change to their current employment contract to include short-time working and lay-offs, which will then be a permanent change to their contract of employment and it must be confirmed in writing. If it’s decided it’s a temporary change, this must also be confirmed in writing.
Laying off and short-time working during
How long an employee can be laid off or on short-time working will depend on how it has been written into the employment contract. However, there is no limit to how long they can be laid off or put on short-time working for but you may wish to express that in the contract or contract change.
Annual leave accrual
Whilst employees are either laid off or on short-time working, they accrue annual leave in their usual way.
What about probation during Furlough?
If employees are in a probation period and their probation comes to an end when they are on Furlough Leave, it’s best practice to review all work to date and determine if there is enough evidence of their performance in their role as well as their conduct and behaviour, to reach a decision as to whether you should extend or confirm appointment. There is not hard and fast rule, but passing probation early may help maintain morale of that individual as well as retain them.
Redundancies
Redundancies should always be a last resort for any business and regardless of the current COVID-19 crisis. The Government introduced the Coronavirus Job Retention Scheme so they can help businesses to prevent redundancies for as long as possible, not to avoid them totally.
Employers are encouraged to look at other options first: using accrued annual leave, unpaid leave, short-time working, working more flexibly or even lay-offs.
There is an understanding that if a business is in financial difficulty (even with Government grants and loans), they should avoid getting themselves into debt by feeling obligated to continue to trade or pay for outgoings when the income is no longer there.
In this current crisis, redundancies are permitted as they would be if there wasn’t a crisis. But employers should exercise caution when making this decision. They should have a clearly defined business plan, use a fair selection criteria and carry out consultations meaningfully.
Employees that are on Furlough Leave are on a leave of absence, as if they were on annual leave from work, so regardless of whether they are in attendance in work, does not prevent you from considering their role for redundancy.
If you are at the point in your business and you are unsure if redundancies are the best way forward, contact one of our HR Experts today on 0843 176 0266 / email: hello@specialisedhr.co.uk, for a free 10-minute consultation.
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