The End of Furlough

The furlough scheme implemented by the U.K. Government in April 2020 as a response to the lockdown measures during the Covid-19 crisis ends today, 30 September 2021. It is highly unlikely to be reintroduced, even if the government reintroduces restrictions this winter.

At the beginning of August 2021, a period which had seen restrictions lifted for several weeks, there were around 1.6 – 2 million workers, or around 7% of the working population still on furlough, according to Reuters[1]. Although one would assume that, almost two months later, some of those workers will have returned to work, a large number – probably the majority – will also likely be facing redundancy this autumn now that the furlough scheme is ending.

Large Numbers of Redundancies Expected

Recent employment tribunal rulings have indicated that failing to consider furloughing an employee, rather than making them redundant, would result in an unfair dismissal where the scheme was able to be used appropriately[2]. This is advice that solicitors advising companies have been giving for eighteen months. During any year, even in times of economic growth, there are hundreds of thousands of redundancies made by companies as companies dispose of lines of business, streamline, make acquisitions and move into new areas of business. It is highly likely that some companies have simply held off making redundancy decisions – some related to the Covid-19 pandemic, some unrelated – because the furlough scheme supported their employees. Regardless of economic growth bouncing back this year, the employees who would have been made redundant in 2020 and 2021 will sadly likely be made redundant this autumn.

Global Instability

Regrettably, the likelihood of redundancies being made this autumn due to the end of the furlough scheme is greater due to the various issues facing the U.K. and the world at present. There is a global shortage of HGV drivers, mainly due to thousands of people leaving the industry due to many decades of poor pay, appalling working hours and conditions, and the Covid-19 crisis seeing a seizure in demand. This is now exacerbated by an energy crisis that has seen China rationing electricity, warnings of blackouts across Europe and an increase in prices. Here in the UK, we have been hit by all these issues, plus panic buying of petrol leading to some workers being unable to undertake their work efficiently or at all. These issues are unquestionably going to adversely impact the economy and will lead to redundancies of those who were on the furlough schemes, and many who were not.

New Jobs are not like the Old Jobs

There is cause for optimism, however, given that there are around one million job vacancies in the U.K. according to the ONS[3]. That said there is likely to be a mismatch between the skills of those leaving employment this autumn, and the skills required of candidates for the new roles advertised. It is also feared that many older workers will lose their jobs this autumn and not be reabsorbed into the employment market due to this mismatch in skills requirements and, frankly, due to the rampant age discrimination that persists in the employment market for those over the age of 50 who are seeking employment[4]. Although age discrimination exists at the point of job seeking, it is very hard to prove and damages are purely speculative, leading to very few people bringing cases.

 

[1] https://www.reuters.com/world/uk/share-uk-workers-furlough-steady-7-ons-2021-08-26/

[2] See Mhindurwa v Lovingangels Care Limited

https://assets.publishing.service.gov.uk/media/60f025b9e90e0764d0ab7d30/Mrs_B_Mhindurwa_v_Lovingangels_Care_Limited_-_3311636-2020_-_Judgment.pdf

[3] https://www.ons.gov.uk/employmentandlabourmarket/peopleinwork/employmentandemployeetypes/bulletins/jobsandvacanciesintheuk/august2021

[4] https://www.telegraph.co.uk/money/consumer-affairs/midlifers-will-squeezed-workforce-furlough-ends/