Can Furloughed Employees Become Redundant?
On announcement of the first lockdown back in late March 2020, the government announced their Coronavirus Job Retention Scheme in which employers could furlough an employee. This would mean that the government would pay 80% of the employees wages up to £2500 per month. This scheme has now been in effect for almost a whole calendar year and is expected to last until at least the end of April of this year.
The main aims of furlough are to:
Avoid mass unemployment, which would have catastrophic consequences of the economy.
To ensure that employers have a readily available workforce in order to save time and money looking for new staff when normality resumes.
However, it is possible that employers may not see their business fully recover in time for the scheme's end and many employers may still need to make redundancies across the country.
Furloughed employees can be made redundant, but there are labour rights policies which a business must cover itself against.
And so in answer to the previously stated question – yes, you can in fact make an employee redundant whether they have been, or still are, on furlough. You will be, however, required to show proof that all options to avoid such measures have been considered, eg; reducing hours, reducing pay and restructuring.
You will also need to show that you have followed fair redundancy selection procedure and should seek volunteers for redundancy first. Although there is no obligation to accept the volunteer’s redundancy application.
Once made redundant, eligible employees (someone with two years continuous service for the business) will be entitled to SRP, or statutory redundancy payment, which is based on their age, length of service, and a statutory week’s pay. This can be calculated using a number of websites online, and any required redundancy payments must come from the business.
For assistance on business decision-making, be sure to contact our accountants in Coventry as soon as possible. We can enable your business to realise its potential whilst standing alongside you when having to make tough decisions.
