“Particularly where the employees facing redundancy have long service – this is likely, as they are the most experienced and will have been the most expensive to make redundant last year and remain on furlough – the coming costs could well push businesses under.”
Having continually welcomed the Government’s efforts to support the UK’s small business network through this crisis, The HR Dept has played an important role in lobbying for change to the Coronavirus Job Retention Scheme (CJRS) since it was rolled out last spring. The company successfully campaigned for the introduction of a flexible element to the scheme, as well as helping ensure that the changes happened in July, rather than August as originally planned.
Asking For Changes Before The Budget
Now it is recommending a further change to the rules to allow the furlough grant to contribute towards notice pay again, as was the situation last year.
Margaret Adewale said: “If the furlough grants could be put towards notice pay again, employers could potentially start the redundancy process now. Then, if the situation proves less dire than expected, they simply retain the employee and stop the notice period – at no additional cost to the business or the taxpayer. If the redundancy still needs to take place, much of the notice pay cost has already been absorbed.
“It wouldn’t cost the Government any extra – the Exchequer is already contributing furlough periods during this time anyway. However, with the reality of redundancies rapidly approaching, this measure would let small business take those decisions now, so we can avoid a mass of insolvencies further down the line.
“Otherwise, there is a serious risk that businesses which delay the redundancy process until the end of the furlough period will face significant costs, especially regarding long-serving employees.
“These could sink the whole business, with the Government picking up all the redundancy costs, through the National Insurance Fund. It’s not a winning situation for anyone involved – the business or the employees most importantly, as well as the taxpayer and the Government itself.”