Furlough extension warning: New rules could lead to redundancies – what you should know

Furlough payments have been keeping many people afloat during the coronavirus pandemic. Many were worried that this scheme would come to an end before the economy recovered but recently, Rishi Sunak eased some of these fears.


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On May 29, Rishi confirmed that businesses will be given the flexibility to bring furloughed employees back part time from July 1, a month ahead of schedule.

This update was made after the chancellor already confirmed that the scheme could be utilised up until October 2020.

These extended rules were welcomed by both workers and employers across the country but some have warned that there could be long term consequences to look out for.

Emma Swan, the head of commercial employment law at Forbes Solicitors, commented on the changes: “There’s been two key updates to the Coronavirus Job Retention Scheme (CJRS).

“The first is that from 1st July 2020 furloughed workers will be able to work part time. Previously, workers enrolled on the scheme could not work at all.

“This change means some workers may have to start returning to workplaces and if this is the case, they should find out how their working day and environment will be affected.

“Employers have a responsibility to consult staff about workplace health and safety, which includes making any changes in line with Government guidance on working during the pandemic.

She went on to warn that the changes made could be too little too late for some:

“People may find the start and end time of their working day is staggered to avoid any congestion in and out of workplaces. Or they may find that new shift patterns are being introduced to help compliance with social distancing while working. Not all employees may be comfortable with such changes and it’s better for them to speak with employers sooner rather than later to look at what their options are. Employees have a right to reject these changes, but this could also mean they’re effectively rejecting the opportunity of a job.

“Although the CJRS has certainty enabled many employers to retain staff and the introduction of flexible working for furloughed workers is welcomed, it’s likely to have come too late for some employers. There are businesses which haven’t been able to trade at all and won’t have enough cash flow to pay employees returning to work, even on a part-time basis. These companies could have probably done with employees working in some capacity during lockdown to help their chances of survival.”

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One of the biggest changes made to the furlough scheme was how it is paid.

From August, employers will be asked to contribute to the furlough bill, although the amount received by the worker themselves will not change.

This change is understandable given the cost to the state (and therefore, taxpayer) but Emma warned that this change could lead to a wave of redundancies: “The second update to the CJRS is that from August, companies will have to make financial contributions to the salaries of furloughed workers. These contributions vary from covering National Insurance (NI) and pensions in August to actually paying part of furloughed workers’ wages in September and October, and then returning to paying full wages from November.


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“Unfortunately, the ongoing impact of COVID-19 means not all companies will be able to cover these financial contributions, which could leave some workers facing redundancy.

Furloughed workers should maintain regular contact with their employers to find out how their job is affected now and how it’s likely to be impacted over the next six months.

“Employers have a duty to maintain the trust and confidence of employees, which means they’ll be honest about the prospects of redundancies or changes to employment.

“Workers who are more informed will be able make decisions sooner rather than later to find other work and protect their income.”

In light of the changes, Ann Swain, the CEO of the Association of Professional Staffing Companies, has called on the government to make further changes and commitments: “The scheme now gives firms the flexibility they require to gradually bring furloughed employees back to work on a part time basis, with the percentage of salary funded by Government tapered down to address any increase in working hours. The fact that this is optional and employers will be able to leave employees on furlough if they choose until the end of October contributing 10 percent and 20 percent of furlough pay respectively is also welcome.

“Initiatives like the Job Retention Scheme have helped to protect employees throughout Covid-19. crisis. However, many employees face unemployment due to the impact of the lockdown and the longer lasting effects of Covid-19 on many sectors of the economy.

“A highly trained workforce will help support the economic recovery and so what we now need is for the Government to invest in reskilling opportunities both at a national and regional level to help businesses fill vacancies and reduce unemployment.

“This should include broadening how Apprenticeship Levy funds can be used. We would also urge Government to support the economic recovery by, where possible, continuing those spending initiatives outlined in the 2020 Budget. This will support jobs and economic growth and get Britain back to work.”

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