The coronavirus outbreak has not only caused thousands of deaths around the world but has caused untold damage to the economy: on 7 May the Bank of England warned the pandemic will push the UK economy towards its deepest recession on record.
As a result of the economic climate many businesses have struggled to maintain revenue and are now relying on the government furlough scheme to pay staff. This means they can keep employees on payroll but temporarily delegate payment of wages to the state.
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The furlough, or job retention scheme, sees employees paid 80 per cent of their salary up to a maximum of £2,500 per month, but means they cannot work for their employer.
The scheme has seen massive uptake: on 5 May the government reported nearly one in four UK workers has been furloughed since the scheme began on 20 April.
But what happens to those employees when the scheme is wound down? Will they be entitled to have their old job back or should they prepare for potential redundancy?
When will the scheme end?
When the furlough scheme was first announced by Chancellor Rishi Sunak on 20 March it was only made available to businesses until 31 May.
On 17 April, as a result of the ongoing lockdown, it was extended to 30 June 2020.
Whether or not it will be extended again is, as yet, unconfirmed. Some reports have suggested it will be wound down in July (and will be reduced to 60 per cent salary before then due to spiralling costs estimated in the region of £40bn).
But currently the end date is subject to change.
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Staff react outside Salford Royal Hospital in Manchester during a minute’s silence to pay tribute to the NHS staff and key workers who have died during the coronavirus outbreak
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Staff inside Camberwell bus depot in London, during a minute’s silence
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NHS staff at the Mater hospital in Belfast, during a minute’s silence to pay tribute to the NHS staff and key workers who have died during the coronavirus outbreak.
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Shoppers observe a minute’s silence in Tescos in Shoreham
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Firefighters outside Godstone fire station
6/30 Salford Royal Hospital
7/30 Salford Royal Hospital
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Hospital workers take part in a protest calling on the British government to provide PPE across Britain for all workers in care, the NHS and other vital public services after a nationwide minute’s silence at University College Hospital in London
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A school children’s poster hanging outside Glenfield Hospital during a minute’s silence
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A man holds a placard that reads “People’s health before profit” outside St Thomas hospital
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Staff members applaud outside the Royal Derby Hospital, following a minute’s silence
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Cabinet Secretary Mark Sedwill, Prime minister Boris Johnson and Chancellor of the Exchequer Rishi Sunak, stand inside 10 Downing Street, London, to observe a minutes silence in tribute to the NHS staff and key workers who have died during the coronavirus outbreak
13/30 University College Hospital, London
Hospital workers hold placards with the names of their colleagues who have died from coronavirus as they take part in a protest calling on the British government to provide PPE
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Staff at Waterloo Station in London, stand to observe a minute’s silence, to pay tribute to NHS and key workers who have died with coronavirus
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Medical staff at the Louisa Jordan hospital stand during a UK wide minutes silence to commemorate the key workers who have died with coronavirus in Glasgow
16/30 London
An NHS worker observes a minute’s silence at Chelsea and Westminster Hospital
17/30 Chelsea and Westminster Hospital in London
18/30 Belfast, Northern Ireland
NHS staff observe a minutes silence at Mater Infirmorum Hospital
19/30 Plymouth
NHS workers hold a minute’s silence outside the main entrance of Derriford Hospital
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NHS Frimley Park Hospital staff at the A&E department observe a minute’s silence
21/30 Mater Infirmorum Hospital
People applaud after a minutes silence in honour of key workers
22/30 Waterloo Station, London
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Wreaths laid outside Sheffield town hall
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A group of trade unionists and supporters standing outside Sheffield town hall
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First Minister Nicola Sturgeon stands outside St Andrew’s House in Edinburgh to observe a minute’s silence in tribute to the NHS staff and key workers who have died during the coronavirus outbreak
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Staff stand outside the Royal Derby Hospital, during a minutes silence
27/30 London
Police officers observe a minutes silence at Guy’s Hospital
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A woman standing outside Sheffield town hall
29/30 Royal Derby Hospital
30/30 Leicester,
NHS workers during a minute’s silence outside Glenfield Hospital
1/30
Staff react outside Salford Royal Hospital in Manchester during a minute’s silence to pay tribute to the NHS staff and key workers who have died during the coronavirus outbreak
2/30
Staff inside Camberwell bus depot in London, during a minute’s silence
3/30
NHS staff at the Mater hospital in Belfast, during a minute’s silence to pay tribute to the NHS staff and key workers who have died during the coronavirus outbreak.
4/30
Shoppers observe a minute’s silence in Tescos in Shoreham
5/30
Firefighters outside Godstone fire station
6/30 Salford Royal Hospital
7/30 Salford Royal Hospital
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Hospital workers take part in a protest calling on the British government to provide PPE across Britain for all workers in care, the NHS and other vital public services after a nationwide minute’s silence at University College Hospital in London
9/30
A school children’s poster hanging outside Glenfield Hospital during a minute’s silence
10/30
A man holds a placard that reads “People’s health before profit” outside St Thomas hospital
11/30
Staff members applaud outside the Royal Derby Hospital, following a minute’s silence
12/30
Cabinet Secretary Mark Sedwill, Prime minister Boris Johnson and Chancellor of the Exchequer Rishi Sunak, stand inside 10 Downing Street, London, to observe a minutes silence in tribute to the NHS staff and key workers who have died during the coronavirus outbreak
13/30 University College Hospital, London
Hospital workers hold placards with the names of their colleagues who have died from coronavirus as they take part in a protest calling on the British government to provide PPE
14/30
Staff at Waterloo Station in London, stand to observe a minute’s silence, to pay tribute to NHS and key workers who have died with coronavirus
15/30
Medical staff at the Louisa Jordan hospital stand during a UK wide minutes silence to commemorate the key workers who have died with coronavirus in Glasgow
16/30 London
An NHS worker observes a minute’s silence at Chelsea and Westminster Hospital
17/30 Chelsea and Westminster Hospital in London
18/30 Belfast, Northern Ireland
NHS staff observe a minutes silence at Mater Infirmorum Hospital
19/30 Plymouth
NHS workers hold a minute’s silence outside the main entrance of Derriford Hospital
20/30
NHS Frimley Park Hospital staff at the A&E department observe a minute’s silence
21/30 Mater Infirmorum Hospital
People applaud after a minutes silence in honour of key workers
22/30 Waterloo Station, London
23/30
Wreaths laid outside Sheffield town hall
24/30
A group of trade unionists and supporters standing outside Sheffield town hall
25/30
First Minister Nicola Sturgeon stands outside St Andrew’s House in Edinburgh to observe a minute’s silence in tribute to the NHS staff and key workers who have died during the coronavirus outbreak
26/30
Staff stand outside the Royal Derby Hospital, during a minutes silence
27/30 London
Police officers observe a minutes silence at Guy’s Hospital
28/30
A woman standing outside Sheffield town hall
29/30 Royal Derby Hospital
30/30 Leicester,
NHS workers during a minute’s silence outside Glenfield Hospital
A statement from the Treasury said: Future decisions on the scheme will take into account further developments on the wider measures to reduce the spread of coronavirus, as well as the responsible management of the public finances.
The Chartered Institute of Personnel and Development (CIPD) says that because the date is currently unknown employers need to plan now for what is likely to be staged return to the workplace over what could be prolonged periods.
What happens to furloughed employees when the scheme ends?
For the millions of people now relying on the scheme to pay rent and bills, it is obviously concerning thinking about what will happen to your income when the scheme is wound down whenever that might be.
Lucy Lewis, partner at HR law firm, Lewis Silkin, tells The Independent: The idea is that employees will be able to come back to work. The scheme is designed so that employers dont need to make redundancies and then recruit a new workforce once the crisis is over their existing workforce will be ready and waiting to resume work.
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But of course this relies on the business being in a stronger position than a few months ago, and for many this will not be the case.
CIPD says that when the scheme ends businesses will either be able to bring employees back full-time or choose one of three options: agreed reduced working hours with some or all staff, furlough staff for a further period (at the expense of the business not the government) or consider redundancies.
What do these options mean for me?
Lewis says of bringing employees back: “This is easiest but most expensive option. It is likely to be used by employers who anticipate that they can get back to near-normal trading conditions in the relatively short-term.
“There is no prescribed mechanism for bringing employees back to work, but we would anticipate giving no less than 48 hours written notice.”
CIPD says if employers are in a position to take staff back full-time employers will need to ensure that payroll staff are aware furlough has ended and they should return to full pay (taking into account the national minimum and living wage rates increases from April for any staff employed on those rates).
If your employer wants to reduce your hours, CIPD says this will need to be in writing. They should also be clear about the reasons for reducing your working hours.
If your employer wants to keep you furloughed then they must consider the terms set out in your original furlough letter. A CIPD spokesperson says: If [the] letter did not include a specific end date, then you can continue to keep staff furloughed on the same terms as the CJRS [coronavirus job retention scheme].
It would be sensible to write to employees to explain that you are continuing furlough (with an estimate of how long for if you can give it).
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If the letter did include a specified end date then employers and employees will need to come to a secondary arrangement before further furlough can go ahead.
However if trading conditions have not improved and staff cannot be taken back, Lewis says the usual redundancy rules will apply including a formal giving of notice and reasons why you are being made redundant.
This is significant because other European countries that have similar schemes in place are imposing restrictions on employers making redundancies. No such conditions are being imposed in the UK, she adds.
The CIPD says: “Remember that redundant staff are entitled to receive notice (or payment in lieu); holidays and other contractual entitlements; and a redundancy payment if they qualify. This is a cost your business will have to pay.
If your business is making more than 20 people redundant (but fewer than 100 people) they must start collective consultation on the redundancies at least 30 days before giving notice to employees. This means if they want to make redundancies when the furlough scheme ends on 30 June they need to start consultation by 31 May.
Can I be made redundant before then?
Citizens Advice says that employees should be aware they can also be made redundant during the period of furlough before the scheme is officially over.
If youre entitled to redundancy pay, it will be calculated using the amount you earned before you were furloughed, it says.
But the guidance is clear that furlough pay cannot be used to pay redundancy packages.
When will I know what is happening?
Employment lawyer Gareth Price of Parklane Plowden Chambers says: “A good employer will maintain good communication with their employees so it is fair and reasonable for employees to want to know the likely status as soon as possible.
“The furlough scheme runs for 4 months to the end of June. It is probable that all employees will know by then.”
