September 17, 2021

Employers could face more tribunals when the furlough scheme ends, warn experts

Employers could face more tribunals when the furlough scheme ends, warn experts

  • The volume of redundancies is expected to rise when the furlough scheme ends in September
  • Over 60% of businesses are expecting litigation to remain at the same or increase this year[i]
  • “Employers need to be very mindful of how they manage the messaging and process of redundancy consultation”

As the UK approaches the end of the furlough scheme on 30 September, experts have warned of an increased risk of litigation, as the number of redundancies are expected to rise.

Renovo, a leading outplacement specialist, has called on businesses to be mindful of how they conduct the redundancy process and to provide support for those made redundant quickly, in order to decrease this risk.

The Government’s furlough scheme, which has supported approximately 11.5 million jobs from 1.3 million different employers across the course of the pandemic, is due to end on 30 September. [ii] On 31 January, 41% of employers had furloughed staff.[iii]

Experts have predicted that levels of employment-related litigation and redundancy claims will rise after September, when many employers will be forced to make cuts to staffing that they had previously held off on.

Analysis by insurance broker Gallagher found that 64% of organisations are expecting business litigation to either remain the same or increase in volume this year.[iv] More than half (56%) of businesses have already faced accusations or claims of unlawful behaviour.[v]

Renovo has warned the risk of litigation will rise alongside the length of time employees have spent on furlough.

Chris Parker, MD at Renovo, explained:

“Many employees who will be impacted by redundancies will have been on furlough for a long period of time and may already feel disconnected from the business.”

“More than ever, employers need to be very mindful of how they manage the messaging and process of redundancy consultation. It will also be very important to look at how they provide support to employees to move on positively post redundancy, and quickly.”

Parker advised:

“Clarity is key. Be direct and honest, be as clear as possible regarding the situation, the possible outcomes and likely next steps. There is a huge amount to consider, so it’s vital that employers allow time to plan the process.

“It’s also worth thinking about bringing in an external third party to operate as a sounding board and test assumptions and process before beginning.”

Renovo is the UK’s leading outplacement services specialist.