The end of the furlough scheme

The Coronavirus Job Retention Scheme, commonly known as furlough, officially closed on 30 September 2021. This unprecedented support measure protected millions of jobs during the pandemic, but its end marks a critical transition point for many businesses.

Employers must now make definitive decisions about their workforce based on their current and projected trading conditions, without the safety net of government wage subsidies.

Reviewing workforce needs

The immediate priority for employers is to assess whether they can afford to bring all furloughed staff back to their previous hours and pay. If demand has not fully recovered, businesses may need to consider restructuring. This could involve negotiating reduced hours or job-sharing arrangements with employees. Any changes to terms and conditions must be agreed upon mutually; unilaterally imposing changes can lead to claims for constructive dismissal.

Redundancy procedures

Unfortunately, for some businesses, redundancies will be unavoidable. It is crucial that employers follow fair and legally compliant redundancy procedures. This includes identifying the correct pool for selection, using objective selection criteria, and carrying out meaningful consultation with affected employees.

For large-scale redundancies (20 or more employees within a 90-day period), strict collective consultation rules apply, and the government must be notified via an HR1 form. Failure to follow these procedures can result in costly unfair dismissal claims.

Final furlough claims and audits

Employers had until 14 October 2021 to submit their final furlough claims for September. However, the end of the scheme does not mean the end of HMRC's involvement. HMRC has established a dedicated task force to investigate fraudulent or incorrect furlough claims. Employers must keep all records relating to their claims for six years. If you discover that you have overclaimed, you must notify HMRC and repay the excess to avoid penalties.