We watched with interest this afternoon as the Chancellor, Rishi Sunak, made announcements to further support businesses. We knew the furlough scheme was to end on 31 October and that is still the case, but further measures have been put in place from 1 November 2020 for 6 months.
The new job support scheme will support the wages of people in “viable” jobs working at least a third of their normal hours.
In our office, there was a bit of head-scratching as the rules do not seem all that straightforward, not least because maths is not my strength. We went around in circles for a bit trying to add up 33% and 77% and 22% and 55%, all of which feature in the announcement and on the graphic below- we think we have now cracked it!!
In simple terms, the government are continuing to support employers to a lesser degree than the furlough scheme. An employee must work at least 33% of their normal hours and will be paid in full by the employer for this. The remaining 66% is split between the government, the employer and the employee so the employee is left with payment of at least 77% of their normal wages.
The government says the Job Support Scheme will help businesses keep workers’ employed throughout winter when trade typically drops.
It will mean that employees can stay in a job on shorter hours rather than being made redundant.
Can we still make employees redundant?
Our opinion at this early stage is that many employers will not feel that this goes far enough and redundancies are inevitable. There will be questions as to which jobs are viable, how the calculations work, what happens in 6 months and so on. There is just too much uncertainty with a pandemic that doesn’t seem to be going away any time soon.
I really hope the new scheme and other measures such as the vat reduction extension for hospitality and loan repayment deferrals allow more people to keep their jobs but I know that many of our clients will press ahead with redundancies. It’s a useful time to remind yourself of the importance of following procedures. A knock-on impact is a huge increase in unfair dismissal claims.
Acas, CBI and TUC joint statement on handling redundancies
Coronavirus (COVID-19) is having a devastating impact on many businesses and workers. Challenges to working practices, disrupted supply chains and weakening demand, are leading many employers to consider redundancy as the only survival option.
Faced with making quick decisions in a fragile economic environment, it can feel as if there are no good answers. No one wants to deliver bad news; and losing people or being made redundant is traumatic, especially for workers and their families.
We know that times are tough and that as a last resort, employers may make redundancies. But our message is that employers should exhaust all possible alternatives before making redundancies. These often emerge from effective consultation with workers and trade unions.
Across our networks and members, we have seen joint decisions to save jobs based, for example, upon more part-time working, cuts to overtime, alternative roles, and retraining. When employers, unions and employee representatives work together, solutions can often result in retaining loyal skilled staff and help avoid the costs of redundancy, employment tribunals and recruitment when the economy recovers.
We call on all employers considering redundancies to work with your trade unions and employees and get the process right by following these 5 principles:
1. Do it openly
There are rules for collective redundancies (those involving 20 or more staff), but whatever the scale, the sooner people understand the situation, the better for everyone.
2. Do it thoroughly
To understand what’s happening, people need information and guidance. Have you trained your staff representatives in how it all works?
3. Do it genuinely
Consultation means hearing people’s views before you make a decision; so be open to alternatives from individuals and/or unions; and always feedback.
4. Do it fairly
All aspects of your redundancy procedure should be conducted fairly and without any form of discrimination.
5. Do it with dignity
Losing your job has a human as well as a business cost. The way you let people go says a lot about your organisation’s values. Think about how you will handle the conversation – whether its face-to-face or remote. And remember, you may want to rehire the same person in the future.
We are asking all employers to work closely with their staff, employee representatives and unions to do all they can to look after their people as well as their business.