Managing the end of furlough: common questions answered
Katherine Maxwell, specialist in employment law at Moore Barlow, offers some reassuring clarity and wise advice as she considers some of the options for embattled employers and addresses the most commonly asked questions.
The pandemic has thrown all it’s got at employers – both at their business and all the people involved in it. While the Chancellor has announced changes to the Job Support Scheme, offering more support for businesses and workers in tier 2 areas, there remains a great deal of confusion around the issue and the end of the furlough scheme. For those employers who will not be taking up the Job Support Scheme in November, we've answered some of the most common questions.
I’m dreading talking to my employees about redundancy. Where do I start?
Firstly, think about the alternatives to redundancy. Are there ways that you can retain staff and still reduce overhead costs? Consult with your staff through the whole process. Focus on the people, not just the business – that’s the key. Employees generally seem more open to negotiating changes to their terms of employment, preferring at least that job security instead of facing dismissal through redundancy. If you can agree changes to employment terms make sure you record them in writing to avoid disputes over what has been agreed and complaints and claims further down the road. That should happen whether it’s over a temporary or a permanent change to their employment. Document those changes so you have that foundation to defend your position if they try to suggest down the line that the process was unfair and changes were not made with agreement. Be clear in your records about what the change is and the time period it applies to.
Always try and part with employees on the best terms possible, because you never know when you might cross their path again.
Get your communication right – don’t shy away from difficult issues like redundancy or pay-cuts when speaking to your employees, and don’t bully or pressurise them to agree to changes either. If you do, you risk arguments that they didn’t genuinely give consent to those changes. If pay reductions are agreed as an alternative, consider agreeing to review that reduction at a date in the future with a view to increasing pay if the business has recovered and able to do so it might just encourage them to agree to changes to their terms of employment.
If you have no alternative but to make redundancies, then when you go through the process be open and treat employees with respect. You will need to hold consultation meetings with those selected. This will involve the need to have difficult conversations and there is a lot to remember when conducting those meetings. It’s helpful to use notes to help remember the key points to cover but try and avoid writing out a full ‘script’, which might feel robotic and inauthentic. Speak to your employees throughout the whole process as human beings, not business assets.
What if there’s an ‘us versus them’ culture clash between returning furloughed workers and regular staff?
Avoiding this relies on good internal messaging. When appropriate you can remind employees that everyone has made sacrifices during the pandemic. Point out that furloughed workers will have felt isolated from the office and colleagues, could be feeling insecure about their future in the company, and will certainly have been feeling less financially comfortable – with a typical 20% reduction in pay – in some cases for a significant period of time. Their sacrifices, it can be argued, have contributed to the business staying afloat by helping to reduce overhead costs.
Similarly, point out that those who’ve stayed in work have no doubt put in over and above what they would normally have done, and they should be thanked for their hard work. Extra holiday might be a good reward for their efforts and the extra hours they have worked. This can help to show them you recognise those efforts and value the sacrifices they will also have made by giving up extra time for the sake of the business and its survival.
How can I make the redundancy process and any permanent changes to employment terms fair?
Ask yourself, first of all, what the aim of your redundancies is. Do you need to reduce staff costs by ‘X amount’ and it doesn't really matter where those staff are cut? Or do you have too many employees in certain roles? After that, plan carefully the process and consult with an open mind as you look at alternatives before making final decisions.
Follow through thoroughly all processes and give employees all the necessary information and guidance they need to gain a clear understanding of what’s happening to the company, and to them. This helps them to understand the position and prepare for meetings when you consult with them. Listen and respond to their questions this means really listening to what they’re saying and being genuinely open to their suggestions. Just carrying out a box-ticking process will not appear genuine, and once an employee is disgruntled, they’ll be more likely to find a host of other things to be discontented about.
Lastly, be sure to carry out your redundancy process with dignity. Cutting jobs has a big business impact, but it also has a huge personal impact on the affected employee. Always try and part with employees on the best terms possible, because you never know when you might cross their path again. Also consider the impact the way you manage redundancies will have on those employees you retain. If those you retain see that you have treated those made redundant with respect and fairly they are more likely to stay with you, seeing you as fair and reasonable employers.
How you dismiss somebody from your business says a lot about your organisation’s values, so adding a genuine human touch to your process – especially at a time like this for all of us – will go a long way.
Interested in this topic? Read Healing the divide between furloughed and non-furloughed employees.