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That’s the warning The HR Dept believes many smaller furlough grant to cover the redundancy from human resources businesses are unaware. notice period, topping up the remaining

HR experts The HR 20 per cent to full pay. Employers Dept, which provides Its experts believe this will prove a major might not realise that this 80 per cent human resources challenge for some small businesses, contribution towards notice can’t advice and support for more than 6,500 many of which are struggling to survive happen again. small and medium-sized businesses this crisis, once the furlough period (SMEs) across the UK and Ireland. comes to an end. “As things stand, changes in furlough rules mean that the employer will not be Rule changes last December mean that Serena May, director at The HR Dept able to use the furlough grant and will furlough grants can no longer contribute Eastbourne, Brighton and Hove, said: need to pay the notice in full, without towards notice pay, a fact of which “Last year, employers could use the Government support.

Left: Serena May Right: Sue Beeby

“Other employers may not understand employees’ statutory rights to notice periods, or age factoring when considering redundancy pay.

“In any case, employers need to be aware of these issues and start preparing now, as time for consultation processes and time and cost for statutory notice need to be factored in.

“Particularly where the employees facing redundancy have long service – this is likely, as they are the most experienced and will have been the most expensive to make redundant last year and remain on furlough – the coming costs could well push businesses under.”

Having continually welcomed the Government’s efforts to support the UK’s small business network through this crisis, The HR Dept has played an important role in lobbying for change to the Coronavirus Job Retention Scheme (CJRS) since it was rolled out last spring. The company successfully campaigned for the introduction of a flexible element to the scheme, as well as helping ensure that the changes happened in July, rather than August as originally planned.

Now it is recommending a further change to the rules to allow the furlough grant to contribute towards notice pay again, as was the situation last year.

Serena May said: “If the furlough grants could be put towards notice pay again, employers could potentially start the redundancy process now. Then, if the situation proves less dire than expected, they simply retain the employee and stop the notice period – at no additional cost to the business or the taxpayer. If the redundancy still needs to take place, much of the notice pay cost has already been absorbed.

“It wouldn’t cost the Government any extra – the Exchequer is already contributing furlough periods during this time anyway. However, with the reality of redundancies rapidly approaching, this measure would let small business take those decisions now, so we can avoid a mass of insolvencies further down the line.

“Otherwise, there is a serious risk that businesses which delay the redundancy process until the end of the furlough period will face significant costs, especially regarding long-serving employees.

“These could sink the whole business, with the Government picking up all the redundancy costs, through the National Insurance Fund. It’s not a winning situation for anyone involved – the business or the employees most importantly, as well as the taxpayer and the Government itself.”

For more information about The HR Dept visit our webiste www.hrdept.co.uk