Furlough’s Ending Very Soon. Here’s What You Need To Know
Written by Huffpost on October 18, 2020
Article Published on Sunday October 18, 2020 7:00 AM by Huffpost
Furlough’s Ending Very Soon. Here’s What You Need To Know
The government furlough scheme has been a safety net to millions during the pandemic. Without it, unemployment would have risen off the charts, but we always knew the support was only going to last for so long.
Under furlough, the government was initially covering 80% of an employee’s wage up to £2,500 per month – but employers are now paying a larger portion.
As the economy began to reopen over the summer, people started going back to work, but following the recent spike in coronavirus cases and lockdowns, many are back to working from home, or facing reduced hours or redundancy.
Chancellor Rishi Sunak has announced a new support package that will replace the furlough scheme in a battle to stave off mass unemployment during the difficult winter months. But with businesses facing reduced demand and constrained capacity, what will life after furlough look like?
So, how is job support changing?
The new Job Support Scheme (JSS) will start immediately after furlough ends on November 1 and will continue until the end of April 2021. Employers will continue to pay the wages of their staff for the hours they work.
For hours not worked, the employer and government will cover roughly a third of an employee’s usual pay. The government’s contribution will be capped at £697.92 a month – considerably lower than the original furlough scheme of £2,500.
The chancellor said ending furlough was a “hard choice” and that the government was focused on protecting ‘viable’ jobs – rather than those that could only exist with the financial support of furlough.
“We have to be mindful of the cost of all these things and we obviously can’t sustain the same level of things at the start of this crisis,” Sunak said.
To be eligible for the new support scheme, an employer must meet certain access conditions and the employee must not be on a redundancy notice – this is in place to encourage companies to retain staff.
The scheme is open to all small and medium sized businesses, even if they didn’t use the furlough scheme.
What if my job isn’t considered ‘viable’?
For the millions of people who have relied on furlough to pay their rent and bills, it’s obviously worrying to think about what will happen from November onwards.
Lyle Copeland, 29, co-founder of Indigo & Ivy Events in London, who has been furloughed since June, says the scheme has been a lifesaver for her. “It’s a real kick in the teeth for an industry worth approximately £40bn that also employs over 500,000 people across the UK,” she tells HuffPost UK. “It seems crazy to cut off any type of support for so many companies working within this space.”
When the scheme ends businesses will have multiple options. A business can either bring employees back full-time, agree to reduced working hours with some or all staff on reduced pay, furlough staff for a further period (at the expense of the business, not the government) – or consider redundancies.
Many argued that the furlough scheme should be extended in some form for people working in certain sectors such as arts, events and hospitality that have been particularly hard-hit by the pandemic.
“With the rule of six set for the foreseeable future, along with conferences being postponed, there is nowhere near enough demand to get close to completing a third of our weekly hours to qualify for any governmental help,” says Copeland. “Especially when you take into account that social distancing rules are set to get even more draconian during the winter months.”
On October 9, the chancellor expanded the job support scheme to cover businesses whose premises will be legally required to shut for some period over the winter as part of local or national restrictions.
Eligible businesses will get grants to pay the wages of staff who cannot work for up to two thirds of each employee’s salary, up to a maximum of £2,100 a month.
What if my employer is considering redundancies?
There’s been a sharp rise in redundancy-induced anxiety, and no wonder – with people dealing with the possibility of suddenly losing their livelihood at a time when unemployment is rising and new jobs are hard to come by.
By law, furloughed employees who are then made redundant should receive statutory redundancy pay based on their normal wages and not on the reduced furlough rate. Employees that have been made redundant who have worked in the same place for more than two years are usually entitled to a statutory redundancy payment that is based on length of service, age and pay, up to a statutory maximum. It’s important to know that the furlough scheme is not there to fund statutory redundancy pay and it is for the employer to foot that bill.
“You can still be made redundant while you’re furloughed. Your employer has to follow the right process and can’t discriminate against you – check if your redundancy is fair if you’re not sure,” explains Dame Gillian Guy, chief executive of Citizens Advice. “It’s worth double-checking contracts, but you might be entitled to pay during your notice period and extra money for your redundancy.”
It’s worth noting the new job retention bonus, which encourages firms to keep and bring back furloughed workers – businesses will be granted a one-off £1,000 payment for every furloughed employee who remains continuously employed through to the end of January 2021.
What about holiday time that I haven’t taken?
You can ask to take holidays when you’re furloughed in the usual way, if your employer agrees. You should be paid in full for any holiday you take within the furlough period and for any paid annual leave you haven’t yet taken.
“Holiday pay, whether the worker is on furlough or not, should be calculated in line with current legislation, based on a worker’s usual earnings. The underlying principle is that a worker should not be financially worse off through taking holiday,” explains Lisa Townsend, solicitor consultant at Richard Nelson LLP.
“Where a worker has regular hours and pay, their holiday pay would be calculated based on these hours. If they have variable hours or pay, their holiday pay is calculated as an average of the previous 52-weeks of remuneration excluding weeks in which there was no remuneration,” she adds.
I haven’t heard from my employer yet …
Employers should engage with their workforce and a good employer should be keeping crystal clear communication between both parties – it’s only fair and reasonable as an employee to understand your situation and know your likely employment status is as soon as possible so you can plan for the future.
“Being let go from your job or back on, with reduced hours and pay, can come as a huge shock and it often feels unfair,” says Gillian Guy. “Work worries are really ramping up. With the end of the furlough scheme in just a few short weeks, a lot of people feel like they’re in the waiting room for a redundancy.
“The hardest thing is people saying that if they lose their job there won’t easily be another to go into – for many, that’s the reality of the labour market.”
If this feels like your situation, you will find a wealth of first-hand experiences from guests and listeners, plus tips on how to stay hopeful, in this recent episode of HuffPost UK’s podcast, Am I Making You Uncomfortable?