At the time of writing, the Coronavirus Job Retention Scheme is due to come to an end on 30 June.
The scheme has already been extended once from the original end date of 31 May, and it is currently unclear whether there will be any further extensions.
While the future remains uncertain, it is sensible for organisations to start planning for the future and, one of the considerations may well be whether they are able revert to their pre-coronavirus structure, or whether changes to the workforce will need to be made.
Briony McDermott, employment solicitor at Wake Smith, looks at potential next steps for your business.
“If it is likely that changes will need to be made to ensure the ongoing efficiency of the business, it is important to ensure there is a strategy in place in advance of the end of the scheme.
“It is likely that businesses will need to consider all options available to them in these difficult times, from temporary reductions in salary to, unfortunately, redundancies.”
The following points are worth considering when planning the next steps for your business:
- Look at cash flow and identify what effect the end of the furlough scheme will have on your business. If it is the case that once the scheme ends the business will likely be unsustainable, consider the options available, and when those options will need to be implemented.
- If you have existing employee representatives, or a recognised union, consider making them aware of the potential issues the organisation faces in the longer term and work with them to see what options are viable.
- If redundancies are possible, try to get an idea of how many employees might be affected and in which roles.
- If 20 more redundancies may be required at one location within a 90 day period, bear in mind the obligation to carry out collective consultation. In the case of a large scale redundancy exercise you will be required to do more forward planning as information must be provided to employee representatives 30 or 45 days before the first redundancies can take effect. There must also be consultation on the reasons for redundancies and ways they might be avoided. Consider whether it would be prudent to put employee representatives in place now, even if it turns out they are not needed.
- Even if numbers of potential redundancies will not trigger collective consultation, consider how long a fair and open redundancy process will take.
- Try to identify the potential costs of redundancies, taking into account how long any process will take, notice pay, accrued but untaken holiday and redundancy payments. If the company will not be able to meet these potential liabilities it is sensible to take advice at an early stage to ensure that company directors comply with their statutory duties.
For further employment law advice contact Briony McDermott at Wake Smith Solicitors on 0114 266 6660.
