The UK’s furlough scheme, the government subsidy of wages during the pandemic, will end on 30 September. There have been a number of last-minute extensions since the scheme was introduced, but further extensions have been ruled out by the UK government.
The scheme has been winding down since July 2021, with employers required to make increasing contributions in order to access the scheme. In August and September 2021 employers need to contribute 20% of wages, with the scheme covering 60%. However, there are still a large number of workers on furlough. At the end of July 2021 it is estimated there will be between 1.1-1.6 million workers on some form of furlough, whether flexible or full-time.
So, will there be a surge in redundancies from 1 October?
Research suggests some employers won’t wait that long. Recent research from the British Chamber of Commerce found that nearly 1 in 5 employers were considering redundancies from 1 August, when the furlough scheme became more expensive for employers. Given the scale of furlough use, it’s likely that many employers will be impacted and will need to consider whether they need to make redundancies, change working patterns, or integrate furloughed staff back into the workforce.
Whether considering redundancies or continuing to use the furlough scheme until it ends, employers should bear in mind the following:
- Furlough claims for August must be made by 14 September.
- Furlough claims for September must be made by 14 October (with 28 October being the deadline to make any amendments to those claims).
- The furlough scheme cannot be used to recoup notice costs (either contractual or statutory) or redundancy payments, meaning that employers must pay these entitlements.