Preparing for the end of Furlough

 

Easing of restrictions and “Freedom Day” on 19 July has brought a small shred of hope to the travel sector but many employees remain on furlough and will do so until 30 September 2021. International travel restrictions remain and the government’s fluid traffic light system for travel means bookings will remain subdued for several more months at least. Whilst other sectors are seeing decreasing numbers of furloughed employees there remains a need for furlough in the sector and potentially beyond 30 September. It remains to be seen whether industry pressure to extend furlough for travel sector employees will result in an extension until the end of the year but current government responses to an extension are not positive.

All employers are now required to contribute 10% towards the furlough payment and from 1 August this will increase to 20% for unworked hours on top of the employer National Insurance contributions and pension contributions.

However despite the increased financial contributions the continuing use of furlough, including flexible furlough, is still a lifeline for employers who are still not operating at full capacity due to restrictions. A combination of increased public confidence, Covid Safe workplaces, continued success in vaccination take up and no reversal in respect of mandatory restrictions will be needed to ensure travel is given the opportunity to move to operate at pre pandemic levels.

Employers will be fearful of a cliff edge scenario from 1 October when furlough support ceases. If there is insufficient income generating work for employees from October 2021 employers may need to consider redundancies or alternatives such as unpaid leave and salary reductions although these would need to be subject to employee agreement. Some employers have changed employment terms during the pandemic to include the ability to temporarily lay off employees in the event of work shortages. Placing employees on either short time working or laying them off for up to 6 weeks in a 13 week period to avoid having to make employees redundant may be more attractive than having to make employees redundant with the requirement to pay statutory redundancy and provide notice. However unless the employment contract permits lay off and/or short time working with reduced or no pay this will be difficult to achieve as it will be necessary to obtain employee consent to the changes. Depending on the numbers of employees concerned collective consultation may also be required before employers can put in place such measures.

If redundancy is the last resort, the timing of the redundancies and the financial planning for exit payments need to be considered now. With 30 day consultation periods required for 20 or more redundancies, (45 days for 100 or more redundancies), employers will need to start their consultation by the end of August if dismissals are to tie in with the end of furlough. Whilst furlough payments originally did not exclude notice pay it is now clear that notice pay cannot be claimed as part of the furlough grant and therefore statutory redundancy pay, notice periods and accrued holiday pay need to be factored into redundancy payment costs.

Where redundancies are not contemplated and furloughed staff are to return to work a furlough returner plan may minimise any negative effects of being absent for a lengthy period and also ensure employees are familiar with any new ways of working that have been introduced during their absence.

There are few employers that have not experienced changed employment working practices since March 2020. One of the more common changes is the move to a  hybrid working model with employees no longer required to work permanently and/or full time at a set location and whilst this will not apply to all those in travel there is still a significant number of travel employers that have accepted many roles can be carried out without a physical full time return to a traditional workplace.

Many employers are finding the practical management of hybrid working changes is proving difficult and are investing time in supporting and upskilling managers to deal with new ways of working. This may include managing requests for remote and flexible working and spotting signs of “burn out” and wellbeing issues where employees are working at home. Some managers struggled with people management pre pandemic but the last 16 months has shone a light on the quality of people management skills and identifying where improvements can be made will be crucial to any employers who have moved to hybrid working.

Good communication is more important that ever to minimise return to work tensions and ensure employees don’t return feeling isolated, different or even inferior to colleagues who have worked during the pandemic. Time should be spent with returning employees to assess if any skills gaps have emerged during their furlough period and to ensure they are fully up to speed with any business changes.

After numerous furlough extensions it does appear now that employers will have to adapt without the government funded job support measures. The ability to put in place changes quickly and to flex employee resource is now more important than ever. If that flex is not available now employers should consider how to achieve that to avoid restrictive employment practices that will not be fit for business purpose.

ABTA Members can get 30 minutes free advice on preparing for the end of furlough and wider workforce issues using the Employment Law Helpline. DMH Stallard are one of the ABTA Partners participating – to find out more click here.