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  • Q&A: I made staff redundant before the furlough extension. What can I do?

Q&A: I made staff redundant before the furlough extension. What can I do?

The furlough scheme has been extended until the end of March 2021. But what do you do if you’d made staff redundant before this was announced? Here’s everything you need to know.

Monday, Nov 16, 2020
2 min read

The Job Retention Scheme (JRS) or ‘furlough scheme’ was due to end on 31st October 2020, but Boris Johnson announced it was going to be extended—just hours before the scheme was due to end. Following this, Chancellor Rishi Sunak confirmed that the extended scheme would run until the end of March 2021.

This furlough scheme extension is great news for UK businesses. The government’s additional financial support means that employers don’t need to make their staff redundant and can furlough them instead.

But this leaves some employers in a predicament, as many will have already made their staff redundant in anticipation of the furlough scheme ending on the 31st October.

In fact, our BrightAdvice experts have received lots of calls from worried employers about this very issue. So let’s look at this common query and see what you should do if you’re in a similar situation…

Question:

Throughout the coronavirus pandemic, my business has taken a hit. We haven’t been able to operate as normal and there wasn’t enough work for everyone, so I put some of my staff on furlough.

As the end of the furlough scheme approached on 31st October, I realised I wouldn’t be able to afford to keep all my staff once the government’s financial support stopped, so made the tough decision to make my furloughed staff redundant from 1st November. But I wouldn’t have done this if I’d known about the extension—is there anything I can do?

Our employment law expert’s answer:

In a word, yes! The furlough scheme was created precisely so you don’t have to make redundancies.

So the scheme’s extension is fantastic news—no tough decisions and having to let people go. But lots of employers, like you, have already made redundancies…

Don’t worry, the government knew this would happen. Which is why they’ve made it possible for you to bring back any staff you’ve made redundant and put them on the furlough scheme instead.

But there are a few things for you to think about to help you get furlough right:

1. You have to rehire your people

To put someone on furlough that you’ve already made redundant, you have to rehire them.

While you might want to ‘cancel’ an employee’s redundancy and pick up where you left off with the furlough scheme, you effectively need to start from scratch. This means rehiring your employee with a new contract, and then placing them on furlough with immediate effect.

2. Staff must meet certain date criteria

While any employee can be placed on furlough under this extension, everyone needs to meet certain criteria date-wise:

  1. If you’re rehiring after redundancy, the employee must have been made redundant after 23rd September 2020.
  2. But if redundancy isn’t a factor, the employee must have been on your PAYE payroll by 23:59 on 30th October 2020.

This means you must have made a Real Time Information (RTI) submission notifying payment for this employee between 20th March 2020 and 30th October 2020.

And if this all sounds a bit complicated, don’t worry. Your employees will probably meet the criteria naturally—this is just the legal nitty gritty.

3. Put everything in writing

It’s good practice to put all important conversations with your employees into writing, but it’s especially important when it comes to furlough.

Government guidance states that you should keep all furlough correspondence for five years, so make sure you officially write to your employees to tell them you’ve put them on furlough—and request a written confirmation response, too.

Got a question of your own?

If you have a question about the Job Retention Scheme extension, or anything else to do with managing your business in the coronavirus pandemic, speak to one of our friendly BrightAdvice experts today.

Our advisers will give you confidential legal advice on any employment law problem you face, and they’re available 24/7.

Call BrightAdvice on 0800 783 2806.


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