NOW IS THE TIME FOR BUSINESS OWNERS TO PREPARE FOR THE COST OF REDUNDANCIES’ Smaller businesses looking to reduce their workforces should urgently prepare for the costs of redundancies, following changes to the Coronavirus Job Retention Scheme made late last year. That’s the warning from human resources experts The HR Dept, which provides human resources advice and support for more than 6,500 small and medium-sized businesses (SMEs) across the UK and Ireland. Rule changes last December mean that furlough grants can no longer contribute towards notice pay, a fact of which The HR Dept believes many smaller businesses are unaware. Its experts believe this will prove a major challenge for some small businesses, many of which are struggling to survive this crisis, once the furlough period comes to an end in April.
“As things stand, changes in furlough rules mean that the employer will not be able to use the furlough grant and will need to pay the notice in full, without Government support. “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 Govern ment’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 Stacey Mead, director at The HR Dept Bristol, Scheme (CJRS) since it was rolled out last Bath and North Somerset, said: “Last year, spring. employers could use the furlough grant to cover the redundancy notice period, topping up the remaining 20 per cent to full pay. Employers might not realise that this 80 per cent contribution towards notice can’t happen again.
4
