· News

Employee furlough scheme extended until March 2021 but HR concerns remain

The UK government’s decision to extend the furlough scheme through March 2021 has been broadly welcomed, although there are calls for a long-term plan to account for the impact the pandemic will have on the UK’s level of employment.

At present employees will receive 80% of their usual salary for hours not worked, up to £2,500 a month, though the chancellor told the Commons that the scheme will be reviewed in January.

The self-employment income support scheme (SEISS) will also be increased. A third grant covering November to January will now be calculated at 80% of average trading profits, up to a maximum of £7,500.

Speaking to HR magazine, Martin Tiplady, CEO of Chameleon People Solutions said he expected an extension of the furlough scheme, but not until March.

“However we have to be realistic and recognise that the scheduled review in January will curtail the scheme and require employers to cough up significantly more,” he said.

Tiplady maintained that the extension could simply be a deferral of the inevitable ‘huge’ round of redundancies that will come in February and March 2021.

“For that, HR departments should use this time well and not waste it and plan properly and diligently for what will happen in Spring 2021.

“HR needs to think carefully about the process and communication of those redundancies as well as the effect on those fortunate to be left behind,” he said.

CIPD CEO Peter Cheese welcomed the extension. He said: “We are pleased the government has put in place more certainty by extending the furlough scheme until March so employers in the worst hit sectors have more time to plan ahead, but also to help minimise redundancies over the difficult winter period.”

However the CIPD also stressed that more support was needed.

Cheese added: “We would also urge the government to provide more support for those people who do lose their jobs with funding for training, coaching and support to find alternative work.”

New data from the Annual Survey of Hours and Earnings (ASHE) has also highlighted that there is no protection to stop workers being paid less than the minimum wage when on furlough as the remaining 20% ‘top-up’ of wages by employers remains optional.

TUC general secretary Frances O’Grady said this was a fundamental flaw in the government’s support package.

She said: “It’s not right to ask millions of low-paid workers on furlough to survive on less than the minimum wage. The Chancellor must fix the scheme so their pay is topped up to 100%. And he must offer to help those self-employed workers who are falling between the cracks."

Philip Richardson, partner and head of employment law at Stephensons Solicitors LLP, told HR magazine that the extension gives HR teams some “breathing space”.

“HR teams now have more time to reevaluate individual roles and look at any viable alternatives to redundancy.

“Consulting with staff on measures such as pay cuts or variations in working hours could keep people in jobs during these difficult times in the hope that business conditions improve in the new year,” said Richardson.

Further reading:

Weathering the storm: what HR should know in light of lockdown 2.0

Call for further education for furloughed workers

Is it time to re-think the recruitment process?