The past week has seen the end of the UK’s flagship Covid-19 employment support programme, the Job Retention Scheme (JRS), or furlough as it’s become popularly known.  

The government had initially planned to end furlough earlier in the year but the course of the pandemic and the enormous economic impact it has had on many firms forced a rethink. But now the time has come to end the scheme, and despite widespread fears of mass redundancies, according to the BBC, the number of firms planning redundancies was still close to record lows in September.  

“Just over 200 firms in Great Britain informed the government of plans to make redundancies in September, with a total of 13,836 jobs at risk,” the report said. “This was a slight increase on August, but far below the levels seen last summer, and among the lowest numbers seen in data which stretches back to 2006.” 

But now, JRS is no more, which means that UK employers who have used the scheme will need to decide their next steps. Here are some of the options open to them 

Option 1:  bring furloughed employees back on their pre-furlough terms and conditions.
This will probably only be an option for businesses that haven’t suffered much over the pandemic and are ready to start investing in growth again. For a business contemplating this option, know that staff returning from furlough will need to re-integrated into the business.  

In large part, this will largely mirror the process employers followed when bringing employees back to the workplace. That will likely involve health and safety risk assessments, consultation with employees, consideration of reasonable adjustments for disabled employees and so on.

Option 2: Ending furlough and bringing staff back to work on reduced hours and pay
If you need to plan for the longer term, and expect a return to normal trading conditions in the medium to long term, it will make sense to focus on retaining staff existing employees in a way that matches the new reality for the business. Any alteration to the hours that employees work and their pay represents a change to their employment terms and conditions so make sure you get employees’ written consent.  

Option 3: Ending furlough and bringing staff back to work on the same hours but reduced pay
As above this option will require employees’ consent – so consider what measures you can offer to mitigate for the loss of income they will suffer. Are there in-kind benefits you can offer that won’t hit the bottom line? Or perhaps some longer term bonus or other incentives to encourage staff to return on lower wages for the time being.  

Option 4: Ending furlough and asking staff to take unpaid or part-paid leave
This option may appeal to employers who want to retain their employees (perhaps because they are highly skilled) but need time to allow trading conditions to return to normal. 

Unpaid or part-paid leave would usually be agreed on a purely voluntary basis and any such agreement should be set out in writing. In asking for volunteers for unpaid leave or part-paid leave, you might want to reserve the right to decline requests (so that you do not lose too many employees in business-critical roles). 

Whichever option you decide is best for your business in the short, medium and long term, we can help you handle the employment, tax, accounting and payroll arrangements that suit that strategy.