What now re coronavirus furlough?

The UK government furlough scheme, which is due to finish at the end of October, allowed many businesses to retain staff and continue trading, says Ashley Harkus, partner and head of employment law at Everett Tomlin Lloyd and Pratt Solicitors, of Newport and Pontypool.

But it has been reported that the extreme damage caused to many sectors of the economy during lockdown has already led to an estimated 150,000 redundancies in the UK and a number of employers are considering how they can continue to trade going forward.

Some government initiatives, including the proposed payment for retained staff returning from furlough, reported grant support for new qualifying employees and grants for new businesses may reduce the impact, although a recent report by the National Institute of Economic and Social Research suggests that there may be more than a million redundancies across the country during the remainder of the year .

While many businesses, especially in retail, leisure and parts of the manufacturing sector, have seen a significant or in some cases complete reduction in income, employers will need to act carefully to ensure any redundancy process is fair or that any instruction to return to work is reasonable and justifiable, as the extreme circumstances of the pandemic will not be seen as a defence against an unfair or discriminatory dismissal.

At present, any employee with more than two years service can take a claim for unfair dismissal if they believe that their employer has failed to follow a fair process.

Employees who have a disability or who believe that they are being treated less favourably because of one of the criteria under the Equality Act, which includes but isn’t limited to race, gender, disability, or pregnancy could take a claim without the need for two year’s service.

It’s also worth bearing in mind that any employee dismissed for refusing to follow an instruction, which they consider to be contrary to Health and Safety Law, could take a claim to the Employment Tribunal.

One of the issues reported in the legal press is how to treat people who are either shielding or cannot return to work for health reasons. Employers have a duty of care to their staff to provide a safe workplace and insisting an employee, who is shielding or has health issues, should return with a threat of dismissal or redundancy if they don’t is likely to lead to a significant risk of legal action unless other options such as home working, protective steps in the workplace, alternative roles or alternatives to dismissal are considered, for example taking leave, unpaid leave or a sabbatical.

The government has recently announced that employees who are made redundant will be entitled to notice and redundancy pay at full rate rather than the 80 per cent current minimum under the furlough scheme.

There has also been a announcement that the cap for damages in the Employment Tribunal for unfair dismissal will be 12 months full normal pay rather than 12 months furlough pay. It is anticipated there may well be further measures to encourage employers to act fairly.

Any employer considering redundancies, restructuring or changes to job roles needs to ensure they follow a fair process and should exercise caution and obtain advice. There are a number of sources of advice available for employers and employees from Government websites, ACAS or specialist employment law advisors.