Businesses need to start preparing for the end of the Government鈥檚 Coronavirus Job Retention Scheme (otherwise known as the 鈥渇urlough scheme鈥) now, even though it may be extended, a leading employment lawyer says.
Donna Morcom, who runs (an employment and HR specialist), said the furlough scheme has thrown up a host of unresolved issues, not least how it is going to end, and said: 鈥淭his is a very worrying time for employers and employees alike.鈥
She said the scheme could well end up running longer than its current end of June cut-off date because businesses may not be ready to be weaned off the programme, which guarantees furloughed workers 80% of their pay.
But when it does end, Ms Morcom said "employers will need to look at how they treat staff who are being brought back, and consider the feelings of those who have worked throughout the pandemic lockdown while colleagues have been on furlough鈥.
She said firms will also have to pay special attention to other Covid-19-related issues, such as whether it is safe to allow people into workplaces, and whether employees who are working from home are being treated equally.
Sekoya has offices in Plymouth and Cornwall, but has clients nationwide, and Ms Morcom also works as a solicitor for the London-based national law firm Excello Law.
Here is what Ms Morcom has to say about the furlough scheme and other coronavirus-related employment issues:
When will the furlough scheme end?
鈥淭his is going to go on for some time, we don鈥檛 know how long鈥 said Ms Morcom. She said the official end is June 30, but it could go on longer, especially as some businesses, such as in the hospitality sector and universities, may not be able to fully reopen until Christmas or spring of 2021.
It was Ms Morcom鈥檚 prediction that the Government could 鈥渢aper鈥 the scheme, continuing to pay some workers a proportion of their wages until businesses fully recover from the damaging effects of lockdown.
鈥淚t is expected that the furlough scheme could be extended beyond June, we don鈥檛 know how long for,鈥 she said. 鈥淚f they start to release lockdown in August or September, it will take the economy a while to get up and running.
鈥淭he Government will have to do some sort of tapering for employers of the current scheme. For example, this may entail employers being able to claim a percentage, possibly 50% of an employee鈥檚 pay under the current scheme even maybe when employees return to work but are under used.鈥
Ms Morcom also predicted a spike in redundancies once the furlough scheme ends and said: 鈥淯nless the Government steps in and tapers there will be redundancies. There are already people being made redundant whilst on furlough as employers are struggling with cash flow and are preparing for the end of furlough.鈥
She has personally dealt with firms in the manufacturing and education sectors that have started redundancy processes for furloughed workers this week.
鈥淓mployers are entering consultations with employees now so that periods of notice will be covered by furlough, meaning the employer only has to top up wages by 20% for the employee鈥檚 notice period, although this should only be used as a last resort.
鈥淓mployers are also looking at restructuring their businesses now, so they are more flexible when they come out of furlough.鈥
What happens to workers after furloughing ends?
Ms Morcom said life for workers will 鈥渓ook very different鈥 after lockdown and furloughing is done. She said employees who have ploughed on, often on reduced pay, during the pandemic may feel aggrieved, and employers should look at some sort of reward scheme.
鈥淔or those in an organisation that were never furloughed , we could have a disgruntled workforce,鈥 she said. 鈥淪ome are at home doing nothing for 80% of their pay, others are trying to prop up the business on 20% more 鈥 and doing significantly more work in order to cover those on furlough.鈥
She said 鈥80% to 90%鈥 of inquiries she receives are from exhausted workers, who have been overstretched during the pandemic lockdown.
鈥淭hey are doing twice the amount of work for less pay,鈥 she explained. 鈥渟o it鈥檚 about looking after those employees, looking after their mental health, and rewarding them. Maybe employers could offer shares in the business, so they can profit from the hard work they are putting in now.
鈥淥r another bonus-type scheme, contingent on coming out the other end, when the business has attained a certain profit level.
鈥淭o not do so, may leave employers with people being unmotivated and going off sick and sickness procedures are expensive and difficult to run.
鈥淪o you need to look after those people still in the workforce and make sure they take some holiday in this period too, even if only short, so they don鈥檛 get burnout.鈥
What can furloughed workers do?
Ms Morcom said workers on furlough cannot be asked to undertake any work during this period but can still receive training. She highly recommended firms should be looking at this option because it will make good business sense for them to hit the ground running when the lockdown ends.
鈥淔urloughed people can do training,鈥 she said. 鈥淪o during this period, a great way to make sure the workforce is ready (for returning) is having them trained on things they weren鈥檛 employed to do previously. During this period employees should be encouraged to keep their CPD (continuous professional development) and professional profiles up to date on Linkedin and other platforms.
鈥淯ndertaking online and mandatory training would be good too, for example in the restaurant trade.鈥 She added 鈥淭his is also helpful as it maintains a sense of normality including continuing to think about work, so re-integration will be easier mentally once we come out the other side of this and return to work.
She said businesses need to look ahead at what their staff will need to be able to do once the pandemic is over, as the business regroups and looks for new opportunities.
鈥淚t鈥檚 about getting business owners to think about the business going forward and the long term," she said. 鈥淣ow is a really good time to take stock. Re-training people now to fit in with a longer term plan where more people are doing more things differently. So when you do invite people back they have skills to undertake other work within the business that they didn鈥檛 before. The workforce is going to need to be more flexible with fewer people covering more roles as businesses aim to cut staff costs in order to break even.鈥
What else will employers need to consider?
Ms Morcom said firms will need to examine workers contracts, and how terms and conditions of employment will have changed. Especially given the change in the law at the beginning of April.
She said they must ensure they have treated workers properly and abided by the law 鈥 particularly as furlough causes staff to have a temporary pay cut.
If they agreed to a pay reduction, when does this extend to? And if they didn鈥檛, should they be laid off? And how does a company go about doing this?
Also, for those staff who are going to continue to work from home the employer must ensure the law surrounding GDPR, health and safety and compensation for use of home electricity, for example, are complied with.
And there are other things to consider too. Ms Mrocom said: 鈥淓nsure staff who took holiday during this period, are paid in full even if they are on furlough. Some employers missed paying employees full pay for the bank holidays leaving them on the wrong side of the law.
鈥淲hen workers return to work from furlough, they must either receive 100% of their pay or be laid off (if included in their contract), unless you have agreed something different,鈥 she stressed. 鈥淭here could be a raft of unfair dismissal claims if employers have not done this correctly, as it would be breach of contract.
鈥淭hen employers need to consider how they are going to get people back into work. If social distancing exists until Christmas we have to think about the flexibility of workplaces.
鈥淭here are also those people still working from home. Employers have a responsibility to them, and at the moment no one is being compensated for things like electricity use. People will start making those claims.
鈥淎lso thinking about insurance - who is responsible for covering work equipment against loss or damage? A work-at-home policy is something employers really need to think about which clarifies this from the beginning to avoid disputes later.
鈥淏ut it is not all doom and gloom,鈥 she added. 鈥淪ome employees are gaining by not having the stress and cost of driving to and from work, for instance. Many are seeing the benefits of getting back the time they would usually spend commuting to improve their mental wellbeing.
鈥淓mployers should embrace changes brought about by the pandemic when thinking about getting people back to work. Using their new skills in video conferencing platforms they should keep in touch with employees, that goes for furloughed staff too. This will help to quickly re-integrate staff back into the workplace when we are able to do so.鈥
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