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It’s been estimated that the furlough scheme, which came into force in March 2021, has protected more than 11 million jobs. Viewed as a lifeline for many businesses, it will come to a close at the end of September. Whilst some business owners, and perhaps many workers, will mourn its loss, most will be keen to get things back to the new normal?

However, because we still don’t know what will happen as restrictions are lifted and workers return to the office, there might still be serious implications for business owners who are under pressure financially. As a result, they may be forced to reconsider the size of their workforce. With downsizing a possible outcome, redundancies might need to happen.

Our advice for businesses in this situation is to act now. By dealing with potential job losses in a structured and timely way, you will have sufficient opportunity to explore alternatives. With redundancies a sensitive area for everyone involved, we advise good communications and open dialogue from the start. Options that might be less hard hitting and final, include restructuring, making variations to employment contracts with perhaps reductions in salary, cutting overtime or working fewer hours.

Consultation periods

If these options are not feasible, then you will need to factor in consultation periods. If you are making 19 or less people redundant, there are no rules about how you should carry out consultations. But if 20-99 employees are to be made redundant within a business, there must be at least 30 days consultation before the first dismissal takes effect. This rises to 45 days if more than 100 jobs are to be lost.

Obviously with many employees either currently working from home, on furlough or self-isolating, you will need to look at alternative ways to hold consultations with them. There is no legal requirement for them to be done face to face; over the phone or by video are both ok as long as both parties are happy and have access to the right IT facilities. At this point you may need to arrange for employee or union representatives to become involved in the process. This could add more time to the consultation process, so you will need to factor this in too.

Settlement agreements

If redundancy is an option, you might want to think about ways in which you can provide settlement agreements. This gives employees an enhanced redundancy package over and above the statutory minimum redundancy entitlement. When making staff redundant you must give them a statutory minimum of one week’s notice for up to two years’ service and one weeks’ notice for every year they’ve worked for you (up to a maximum of 12 weeks’ notice).

Obviously offering enhanced terms will be attractive for some people. But it’s worth noting that when the employee signs the agreement, they will waive their right to make any future claim arising out of their selection for redundancy. If you are thinking about doing a large-scale settlement agreement process, we recommend having a template agreement, which is negotiated and agreed before each individual employee signs it.

Look after your staff

Furthermore, to help you with this process and provide advice to employees, you can engage the services of an independent HR adviser. We can do this on your behalf, which will not only save you time and money, but will also ensure the process is streamlined, centralised and smooth. This means that those individuals who are affected will receive high levels of help and support. This might be advisable for ensuring the good name of your business at what is a difficult time for everyone concerned.

How can we help?

If you are pondering how your business will function with furlough and what you can do to ensure its productivity and profitability, then please contact caroline.robertson@actifhr.co.uk today for professional HR advice and support.