Why Employment Law Planning Will Be Key For Companies As The Government’s Financial Support Continues To Wind Down
Monday saw the lifting of most restrictions guiding our lives in England. Welcomed by some, feared by others – there’s no doubting it was a milestone in the pandemic. In just a couple of months, the furlough scheme is also set to end which will be a make or break turning point for businesses across the North West as for the first time in 18 months they will face the future without direct financial support from the government.
Many feel it will be long overdue, but for thousands of firms it’s a daunting prospect and it may see the closure of long established companies which will be a crying shame. To demonstrate that unease, we have seen a big jump in enquiries from employers looking for advice about making redundancies, redundancy procedures and settlement agreements for staff leaving through this route.
The immediate assumption might be that this demand is coming from hospitality and travel – the two industries that have been most devastated – but in reality, enquiries are also coming from manufacturers, retailers, and the professional service sectors. That is a worrying trend and clearly demonstrates that many businesses are facing up to the grim reality that they will be letting workers go in order to ensure their long-term survival.
The reasons cited to us are numerous – from a loss of work and revenue since the pandemic started, to cashflow challenges, as well as the inability to pay staff without central support and a lack of confidence that a sustained bounce back will come anytime soon.
Offering advice to employers around these issues is heart-breaking, but the single most important thing they can do is to ensure that a fair procedure is followed and that all agreements are drafted correctly. Doing that will protect both the business and employee and will mitigate any potential bad feelings or subsequent actions.
Forward planning is therefore key as is managing retained staff carefully and sensitively as after so long some may not want to return to the workplace or might be scared to do so; whilst others may simply want to work from home more as it gives them a better work life balance. If you’re prepared to be flexible, then amendments to employment contracts to cover changes in working practices and terms will probably be needed.
Also, employers may want to reduce their employees’ hours which would again mean changes to employment contracts; preferably by agreement, but they may need to be forced through. If that happens then it’s even more important to get the procedure and paperwork right to avoid unfair dismissal claims.
The next few months are going to be critical for thousands of companies and hard decisions will need to be made. That’s going to take resilience, determination and compassion. But the onus is on employers to protect themselves and their workers otherwise the potential financial and emotional cost to all parties will be yet another sad legacy of COVID.