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Government job retention scheme — long live furlough?

There was widespread relief amongst businesses on 12 May.

That was when the chancellor announced the job retention scheme will continue in its current form until the end of July.

We also now know there will be a furlough scheme until at least Halloween. But post-July we can anticipate some significant changes from how the current scheme operates.

However welcome, the continuing support does present some challenges for businesses.

Ongoing challenges

One increasing concern is how to keep colleagues engaged despite their being furloughed — in some case for many months.

I have seen great examples of employers maintaining contact through meaningful updates, training and social events as well as imaginative use of social media.

Such activities will be all the more important given the extension of the scheme.

Separately as some businesses seek to return to a degree of normal working there are challenges arising from employees possibly preferring the comfort of furlough to the perceived risk of a return to the workplace.

Once again communication is key including clear and positive messaging on the business reasons for a return and on the specific steps to address the on-going risk posed by COVID-19. The latter includes continuing to support home working where this is practical.

Great leadership has never been so important.

What about the future?

We await a detailed government announcement on the future of the furloughing post July. This has been promised at the end of May.

In advance the government are dropping a few hints.

One of these is that the government contribution to furlough payments will be reduced from 80% to 60% of an employee’s pay with employers having to make up the balance.

I understand the reasons for this but, given that the scheme is primarily designed to avoid redundancies, any weakening of the support will inevitably increase the risk of job losses.

There is also the suggestion that the strict rule that furloughed staff cannot work for their employer will be varied. This appears attractive; however, we need detailed guidance as to how this will operate.

Clear guidance is particularly important as any right to combine furlough and actual work will inevitably involve revisiting our current agreements with furloughed staff.

Unfortunately the government’s messaging on the current scheme has not been a model of clarity. Hopefully when the scheme mark II is announced the government will have learned from past mistakes.

Kirk Tudhope

Inverness-based partner Kirk Tudhope heads the firm’s employment law team, he regularly represents employers, including private and public sector organisations, at employment tribunals.

Posted, 14 May 2020 by Kirk Tudhope
Categories: Coronavirus | Coronavirus and employment law | Employment | Insights