The Coronavirus Job Retention Scheme will now end on 30 September 2021. But what options do employers have once the ‘furlough scheme’ ends? Victoria Templeton of HR Solutions answers some FAQs.

When does the Coronavirus Job Retention Scheme end?

Following the announcement of the Budget 2021, the Coronavirus Job Retention Scheme (CJRS), also known as the ‘furlough scheme’, will now end on 30 September 2021.

The Government announced on 3 March 2021 the extension of furlough scheme, which has brought welcome news to many businesses. For some businesses, the very difficult decision of making redundancies had already happened, however for many, this announcement has given an extra lifeline, enabling employees to remain in work longer.

What is Coronavirus Job Retention Scheme?

The extended furlough scheme will allow employers to claim under the CJRS for eligible employees:

• employers can claim 80% of an employee’s usual salary for the hours not worked, up to a maximum £2,500
• employers will be asked for a contribution of 10% from July
• employers will be asked for a contribution of 20% in August and September towards the hours their staff do not work

For periods ending on or before 30 April 2021, you can claim for employees who were employed on 30 October 2020, as long as you have made a PAYE Real Time Information (RTI) submission to HMRC between 20 March 2020 and 30 October 2020, notifying a payment of earnings for that employee. You do not need to have previously claimed for an employee before the 30 October 2020 to claim for periods from 1 November 2020.

For periods starting on or after 1 May 2021, you can claim for employees who were employed on 2 March 2021, as long as you have made a PAYE Real Time Information (RTI) submission to HMRC between 20 March 2020 and 2 March 2021, notifying a payment of earnings for that employee. You do not need to have previously claimed for an employee before the 2 March 2021 to claim for periods from starting on or after 1 May 2021.

Is flexible furlough still available?

Yes. Since July 2020, the furlough scheme has allowed employees to be on furlough for a proportion of their normal working hours, and continue working, albeit on part time hours. An employer does not have to furlough an employee for 100 per cent of their normal working hours. Depending upon business needs, the furlough scheme can be used to allow some working whilst also being on furlough leave.

Is the Job Retention Bonus available?

At the same time as the government announced the furlough extension in November 2020, they also clarified the position with regards to the coronavirus Job Retention Bonus, which was due to be paid in February 2021.

Due to the CJRS extension, the Job Retention Bonus was not paid in February. However, the government indicated it may be used in the future.

What are the alternative options to the Coronavirus Job Retention Scheme?

If your business does not qualify for the Coronavirus Job Retention Scheme, other options available to businesses feeling the negative effects of COVID-19 include:

Freezing budgets

Freezing budgets during a crisis is perhaps one of the first steps to take. Employers should take all obvious options to cut costs before resorting to either redundancies or making fundamental changes to employee’s terms and conditions of employment. As well as putting a freeze on budgets, you could also not backfill vacancies when people leave and put a halt on recruitment.

Flexible working

Finding innovative ways in which to deal with the crisis other than redundancy is essential, and flexible working is one of them. Flexible working can be permanent or temporary and examples can include:

• part-time hours
• condensed hours
• home working
• term time working
• self-rostering
• job share
• 9-day fortnight
• split shifts/hours

Reducing pay or hours

If redundancies are a real possibility, a more serious option is to consult with your employees about either temporary or permanent pay cuts or reduced hours. This would be a fundamental change to the employment contract and so a full and thorough consultation process would be required, and you would need consent to make the change.

It may seem an impossible option since you are asking employees to take a cut in pay, however, given the current climate, people are likely to prefer pay cuts than being made redundant or the possibility of the business closing.

Extending furlough without HMRC grant

Furlough was introduced in the CJRS specifically to allow employers to make use of government funds which contributed towards staff wages. However, furlough could always be extended without the government contribution to wages.

Employers will have set out the terms of the agreement at the outset relevant to the leave of absence and/or any part time work arrangements under the flexible furlough scheme. So, to continue with an employee being on furlough leave without government support, employers would need new written agreements and follow all the legal processes and consultations.

How do you make someone redundant?

If you are in the difficult position of making redundancies, then these are the key steps that underpin a legally fair process:

1. make a sound business case, based on a genuine redundancy situation including a clear plan as to how the proposed structure needs to operate moving forward
2. identify which jobs are no longer required, whether there needs to be a selection pool and if so, what the provisional selection criteria is going to be
3. determine whether you need to elect representatives, based on the number of roles that will be at risk of redundancy
4. notify the Department for Business, Energy, and Industrial Strategy if you propose to make 20 or more dismissals
5. design a project plan that determines each step starting from the announcement through to terminating the employment contracts
6. make the announcement to all staff, ensuring those out of the office either long term (maternity, long term sick) as well as short term (holiday, short term sickness) are also briefed
7. consult, taking in to account the legal requirements based on number of proposed dismissals
8. seek alternative employment as part of the redundancy consultation process – redundancy must always be the last course of action
9. carry out dismissal meetings once consultation has closed
10. offer support to those who have been confirmed redundant, through outplacement support, which includes support on writing CVs, interview skills, reasonable time out of the workplace to attend interviews
11. allow for payment in lieu of notice, where the contract allows, or require the employee to work their notice

How do you calculate redundancy pay for furloughed staff?

In July, the government brought in new laws to ensure that furloughed employees would receive statutory redundancy pay based on their normal salary rather than their furlough salary.

Statutory redundancy pay is:

• half a week’s pay for each full year worked, under the age of 22
• one week’s pay for each full year worked, between the ages of 22 and 40
• one and a half weeks’ pay for each full year worked the age of 41 and over

To calculate statutory redundancy pay, a week’s pay is set each April by the government and the current rate is £538. Employees need to have two years’ service with the company to qualify, and the length of service considered is capped at 20 years.

About the author

Victoria Templeton is the HR Knowledge Manager at HR Solutions, an outsourced HR services firm offering employment related support and advice to businesses across the UK.

See also

How to support workers without childcare

Working from home: what are the pros and cons for your business?

What is flexible working?

What you need to know about the Job Support Scheme

How to write a redundancy letter

Find out more

Claim for wages through the Coronavirus Job Retention Scheme (GOV.UK)

Local COVID alert levels: what you need to know (GOV.UK)

Job Support Scheme (GOV.UK)

Job Retention Bonus (GOV.UK)

Image: Getty Images

Publication updated: 4 March 2021

Any opinion expressed in this article is that of the author and the author alone, and does not necessarily represent that of The Gazette.