Five steps towards the end of furlough - a guide for SMEs
Ella Bond, an employment lawyer based at Harper James Solicitors' Birmingham Office shares her five steps businesses can take to prepare for the end of the government's current furlough scheme.
The government’s furlough scheme has saved an estimated two million jobs and helped protect tens of thousands of startups and SMEs from closure.
Now, as the end of the scheme approaches, many business owners will be trying to work out the impact on their companies during the last quarter of 2020 and plan for how they can safeguard their businesses and jobs.
The good news is there are a number of things all businesses can be doing now to prepare the best they can. Here are five steps I recommend you follow:
1. Conduct a thorough forecasted assessment of your business
The assessment should include the company financials, taking into account sales, income, reserves and liabilities (including the full salaries of those furloughed workers who are due to return). It should also include consideration of business requirements in terms of workflow and staff resources.
2. Consider your options
If, as a result of the business assessment, it becomes apparent that the company cannot meet its liabilities and/or the business need does not justify the current staffing structure then you will need to consider what solutions may be available to you.
In terms of staffing, this may include possible redundancies, changes to terms and conditions, redeployment of staff or enforcing a right of lay-off (if there is one present in the contract).
There are legal requirements and obligations involved in all of these options so you should seek legal advice to assist you with deciding and implementing any proposals.
3. Prepare to welcome employees back
Ensure that the working environment and arrangements are adapted to take into account those workers returning from furlough. In terms of the workplace, this should include adequate distancing measures being put in place, increased sanitisation of areas and equipment, ensuring that adequate signage is present around the building and making sure that all returning workers have been informed about and provided with copies of any new policies and procedures relevant to them.
Where staff will be working from home, you should ensure that they are provided with any necessary equipment, health and safety assessments have been conducted with regard to their home set-up and environment and that written arrangements are in place with regard to things like ownership of any property those employees will use and payment of expenses such as electricity bills.
4. Conduct return to work meetings with staff returning from furlough
These could be socially distanced face-to-face meetings or conducted remotely e.g. via video call. Check that the employees are clear on the return to work arrangements and also enquire as to how they are feeling about their return to work.
The current health pandemic has had a significant impact on a lot of people's lives, emotional health and wellbeing. As their employer, it is important you are alert to any issues and offer support where appropriate.
5. Manage leave arrangements
Ensure that any staff annual leave arrangements are well-managed to ensure the operational needs of the business are met.
Whilst staff have been able to take annual leave whilst on furlough, many of them may not have done so or will have taken a reduced amount and are therefore leaving many accrued days still to be taken.
Whilst the government has relaxed rules around the carry-over of leave into the next two leave years, the taking of it should still be managed to ensure stability and prevent further problems arising down the line.
Management measures may include requiring staff to take a certain amount of leave on or by specific dates or requiring staff not to take leave during particularly busy periods. Companies could also introduce other control measures such as limits on the amount of leave that can be taken at any one time and the number of people within particular teams or departments who can be on leave at the same time as each other.
Ella Bond is a Senior Solicitor in Harper James' employment team, working with a wide range of clients from startups to large national and multinational companies. She provides practical and commercially focused advice and assistance in relation to a wide range of contentious and non-contentious employment law matters which arise throughout the course of the employment relationship and beyond.