Staffing level review and possible considerations

The furlough system could not last forever – so it is no shock that the government are starting to reduce the amounts they will pay out.

On the upside, it now means some people can actually claim furlough and carry on working which was a bit of an issue for many businesses. (self employed were always allowed to continue working but not ltd company employees).

The down side is that the employer is going to have to start picking up some of the cost from August, which will increase as the months go on.

For many of you  – you have only managed to keep your employees because of the furlough system so we know this change will be setting off alarm bells.

Here are some things for you to consider when looking at what you might do:

If you can generate enough income to cover the employee costs – is it worth holding on to the employee so that you are in a good position when things pick up? If you get rid of employees and then get business you will have a rush to recruit and possible recruitment fees.

If you don’t expect revenue to increase enough to keep the employees then you have TWO possible options:

If they have been employed less than 2 years – you will need to issue a months notice paid at full pay, or whatever is stated in their contract.

If they have been employed longer than 2 years – a redundancy process must be followed, there is a set process to this and they will be entitled to redundancy pay.

What about holiday?

An employer can request that the employee use some of their holiday during their notice period, but they will need to ensure they give double the amount of notice as holiday taken.

This means if the standard notice period is one month – it’s unlikely they can take all their holiday within their notice period and so it would need to be paid to them or you need to serve them notice sooner, so they have more than 1 month.

If you are looking at letting some employees go then there are costs as noted above so make sure you consider how this impacts your cash flow and the longer term performance of the business.

We recommend you speak to our HR team (Ward Williams HR) if you would like to know more about the redundancy process as it must be handled in the correct way to ensure no employment law issues. To get in touch with the team please email [email protected] or call 01932 830664