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Knowledge Base May 12, 2020 2 min read

UK Furlough Scheme Extended by again – Our Analysis

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Rob Winspear

I mentioned in my last blog post (discussing redundancy) that the Coronavirus Job Retention Scheme (“CJRS”) cannot last forever. The government knows this but has felt that now is not yet the right time to wind down the scheme in any substantial way and has in fact extended the scheme in their latest announcement. Good news for employers and staff alike!

Changes to the Coronavirus Job Retention Scheme (furlough leave)

Here’s what you need to know:

  • The scheme is not ending abruptly as was rumoured and has been extended until the end of March 2021.

Are these changes to the scheme a good thing?

Given that the government has reported that 7.5 million people are receiving furlough payments from the government, the debate around the changes is understandable. There are valid arguments on either side. Some say reducing the scheme too soon might cause a large surge in job losses which may lead to greater costs later down the line. Others argue that the longer we hibernate our economy the deeper the resulting recession will be.

In my opinion, the announcement has positive and negative implications. The main positive is flexibility for employers. Extending the scheme, allowing part-time work and part-time furlough, and continuing to offer significant government support (albeit looking like less than 80% coming from the government now) will stop many employers making hasty decisions about redundancy. These changes give those employers the time to see for themselves what the post-furlough business landscape is going to look like as we return to work, allow them to make more considered decisions on how to respond to the coronavirus challenge and give them more options than the binary choice of keeping staff in employment or making them redundant.

It is understandable that the government is attempting to reduce the cost of the scheme now that it is costing nearly as much as the NHS to run. However, this sentiment forgets the fact that if businesses are having to furlough their staff, they are obviously in financial difficulty. Some worse than others. For those companies who are already in severe financial difficulty, I wonder how they are going to find the cash reserves to share the load with the government. This is especially true when I consider how our own Furlough Notice was used by our customers. Very few offered the ‘20% top up’ that our agreement allowed them to do. This implies that such companies are not in a position to offer any support above what the government is offering. I fear that this additional burden on the worst affected businesses may lead to further redundancies. 

Returning to work

If your employer does not think it is safe to return to the office they are not obliged to resume operations. If your employer is insisting you return to work despite valid concerns or problems that reasonably prevent you from doing so, you should submit a grievance to your manager or your HR department if there is one. This will force them to follow a fair procedure to consider your grievance and should reduce the risk of unfair treatment.

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