What happens after furlough

By Donna Bulmer, Managing Partner of Haines Watts North East and Yorkshire.

The Chancellor Rishi Sunak will next week announce plans to potentially wind furlough support down for businesses from July. This comes in contrast to growing fears of spiralling unemployment and company bankruptcies in the summer. It certainly raises some interesting questions for businesses on the decisions that need to be made going forward.

If the Government’s £40bn job retention scheme, which runs until the end of June is not extended in its current form, the six million furloughed staff at around 140,000 UK companies will need to know what comes next. While we certainly need to avoid a cliff-edge moment where support is ended suddenly, there are a number of issues that businesses should consider now.

Engaging employees 

It’s vital for business owners to engage with their furloughed workforce so they are ready to return to the workplace. Savvy businesses will have already put in place digital measures, such as MS Teams or Skype chats, to ensure members of the team feel able to ‘pick up where they left off’. A strong, positive and inclusive culture is the glue that holds any business together and your workforce should know you’re thinking about them.

You should ensure you have good contact details for all furloughed staff and that you engage with them via calls, emails and virtual meetings regularly. There will be more challenges along the way as some employees may need shielding, others will be vulnerable. There are also those who have caring responsibilities.

A phased return 

Companies such as Nissan in Sunderland have recently announced plans for a phased return to the workplace. This comes after work was suspended seven weeks ago resulting in 7,000 workers being furloughed. Business owners will no doubt watch with interest to see how the roll-out of this, and other phased returns, work as they could very well act as a blueprint to other companies.

The term ‘phased return to work’ offers a gradual build-up to normal working hours and this could mean anything from a couple of hours to a few days a week. Any solutions put in place now by business owners need to be flexible and well planned, including regular reviews of the arrangement.

Both employers and employees could benefit from a phased and agreed return to work. However, it is vital that business owners keep the lines of communication open with workers. This will ensure skilled staff feel valued as part of the process and it could potentially help keep recruitment costs down in the long-term.

As part of any phased return, business owners will need to ensure social distancing measures are in place. This might mean spacing workstations and angling them away from each other. You might also need to stagger lunch-breaks to avoid gatherings and organise for more cleaning measures to be put in place. PPE will also be needed for a lot of social interaction.

Action plan around furlough

Business owners need a plan of action now to help with unfurloughing members of their team. There is no harm in revisiting the original written agreement that was made with employees when they agreed to be furloughed. While the detail is still being confirmed, issues such as a notice periods might arise.

Do you need to restructure or make redundancies? 

Many businesses have reported significant pressure on their cashflow as a result of the coronavirus outbreak. What will your cashflow, work flow and staffing requirements be after furlough ends? You need to plan what your staffing needs will be when things start to return to normal.

Furlough leave was brought in to help struggling businesses retain staff they will need in the future when they are in a position to rebuild, rather than making them redundant. However, when the Government scheme ends, businesses across industries, but particularly those in the hardest hit sectors such as retail, leisure and hospitality sectors, are still likely to experience financial hardship, it’s inevitable.

Business owners need to be prepared that they might need to restructure and or redeploy employees to different roles within the business. It is worth thinking about how many possible redundancies you will need to make and from which groups of staff and how and when you will consult with them about this. It’s also prudent as part of the unfurloughing decision to consider if you will be able to keep all those people in work and on what basis.

While there is plenty of information available on furloughing workers, there is not yet any guidance provided by Government on unfurloughing them. Whatever decision you come to, you need to be mindful of employment legislation and contract terms and conditions.

There has been much speculation as to what the Government will announce next in terms of people returning to work. For now, business owners will need to use their best judgment until we have more clarity on the situation.