Furlough has ended - What Now?
Recent research from the Resolution Foundation found that almost 1 million people were still expected to be on the furlough scheme until 30th September. This leaves many people at risk of losing their jobs if their employers cannot afford to keep them.
What happens to affected employees?
When a furlough arrangement ends, the employer and employee go back to their earlier contractual arrangements. But the issue is the backlash this will have on struggling industries such as ‘international travel’; they will without a doubt be affected by the removal of furlough support due to COVID restrictions. A number of redundancies are forecast to take place over the coming weeks and months.
When a worker is made redundant, it is because there is no longer a business need for the work they are doing, and their role no longer exists. If a worker is made redundant, they are entitled to tax-free redundancy pay and must be given notice.
Employers are not allowed to fire someone simply because the company is having a hard time financially – instead there are rules in place to ensure that they follow a step-by-step process to handle the situation in a fair way but this isn’t always the case. Some companies may go under the radar and continue unjustly making workers redundant.
Rights to be aware of:
- Non-compulsory redundancy – in a situation where some employees in the same role are to be retained, the company will usually first ask their employees if anyone would like to volunteer for redundancy.
- Compulsory redundancy – following this, the employer’s legal obligations depend on how many employees they intend to let go.
- Consultation process (triggered by over 20 proposed redundancies) – employers in this situation are legally obligation to consult with legal representatives (e.g. trade unions or colleagues appointed by the affected workers) for a 30-day period.
- Consultation process (over 100 proposed redundancies) – the consultation period is extended to 45 days.
- Seniority (making employees with 2 years’ experience redundant) – minimum requirements for consultation and meetings for senior staff.
- Reasoning – if a small number of employees are being made redundant out of a larger group, they are entitled to be explained the criteria used to make the redundancy decision.
- Fair process - employers are legally obliged to follow a fair process when meeting employees and must listen to any employee suggestions for addressing concerns and avoiding redundancies.
- Contractual notice/tax-free redundancy pay – employees made redundant must be given suitable notice and a redundancy payment.
- Alternatives – the employer must hold meetings with the employers and are legally obliged to offer any suitable alternative vacancies that become available in the business. Any employee on maternity or parental leave should be offered any available role first.
- Competition – the employer can use an interview process to assign an alternative role where multiple employees are eligible.
While the end of furlough brings uncertainty to the job market, as a worker it is important to be aware that redundancy should be a last resort to employers and any affected workers may have a collective bargaining power to negotiate more favourable redundancy terms or ideally alternative arrangements. Any pressure imposed on employees or threats can lead companies open to claims of unfair dismissal.
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