Electra HR

With Furlough Extended, What Does It Mean for HR?

With another lockdown announced in England, Rishi Sunak proposed that the Coronavirus Job Retention Scheme be extended until March 2021, subsequently placing the Job Support Scheme on pause. With the scheme being extended it means that HR have to take some things into consideration.

The extension has a few differences when compared to the initial furlough scheme that has been in place for months prior. It enables employers and employees who have not previously been enrolled with the scheme to benefit from it, given that they meet the qualifying criteria. As the UK gets even tighter with coronavirus related restrictions it means that more people have been affected and more businesses are requiring financial help.

The extended Job Retention Scheme allows for employers to put retrospective furlough agreements in place in situations where they desired to take advantage of the scheme from the beginning of the extension (1st November). In the former Job Retention Scheme there wasn’t this benefit at all. It gives employers a little bit more flexibility when it comes to dealing with furloughed staff members.

One of the most notable changes that organisations and workers will notice is that there is no need to speculate on how a new scheme will work or how many hours should be worked as it is back to the initial furlough scheme agreement. The government pay 80% of workers’ pay for any hours unworked – whether an employee is fully or flexibly furloughed doesn’t matter, they will receive 80%. The employer will cover the national insurance and pension contributions as before.

Regarding redundancies, it is also the same procedure as the initial furlough scheme agreement. Employers seeking to make any employee redundant while they are furloughed can do so. Our blog post regarding redundancy during coronavirus and being on furlough provides the details surrounding these instances. In respect of making someone redundant when placing them on furlough is an option, this does not actually constitute as unfair dismissal. Employers do not have any imposing obligations that state they must place employees on furlough rather than make them redundant, but they are required to consider furlough as an option before making an employee redundant and prove that they considered this option. Many people take the view that furlough was enacted for the purpose of protecting people from redundancies, but this is a moral testing ground rather than based on law.

HR also has to take into consideration paying back any furlough funds and furlough fraud. Furlough fraud was a bigger issue than Rishi Sunak expected, with one example being that many companies took advantage of furlough and never passed on the funds to the employee. With the furlough scheme being extended, HR must be incredibly diligent when it comes to furlough compliance. Many corporations have paid back furlough money to HMRC, but this time are not able to. This is a sign of the times given the economic difficulties businesses are facing with the coronavirus restrictions. With another lockdown it is proving to be even more difficult for the economy to be boosted back into normality, but something that we all have to persevere with.

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