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Collective redundancyLatest NewsJob creation and lossesLabour marketFurlough

Collective redundancies at six-year low

by Rob Moss 14 Jul 2021
by Rob Moss 14 Jul 2021 Asda announced plans to consult its bakery staff about potential redundancies in April.
Photo: Maureen McLean / Alamy
Asda announced plans to consult its bakery staff about potential redundancies in April.
Photo: Maureen McLean / Alamy

The number of employees facing redundancies fell to a six year low last month according to data from the government.

Despite the government starting to wind down furlough from 1 July, only 151 employers submitted HR1 forms – the statutory documentation required when any employer plans 20 or more lay-offs – to the Insolvency Service in June. This compares to 1,289 unique employers in June 2020.

While the actual number can be lower than the planned number submitted on an HR1, just 15,661 redundancies were declared in June around 10% the level one year earlier (155,576).

Xiaowei Xu, senior research economist at the Institute for Fiscal Studies, told the BBC: “The data suggest that there is no spike in redundancies coming in July or August. The labour market is in a much better position than anyone expected at the start of the pandemic, and it shows how well the furlough scheme has worked,”

Furlough and redundancy

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Furloughed staff ‘don’t want to go back to work’

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Under the Coronavirus Job Retention Scheme (CJRS), from this month staff will only receive 70% of their wages from government, as employers must pay the other 10% of their furlough pay.

The IFS has estimated the cost for employers to keep a member of staff on the scheme would rise from £155 per month currently, to £322 during July.

From 1 August, when the employers’ contribution rises to 20% and the government’s contribution reduces further, the cost will be £489 per month. The scheme will be withdrawn completely after 30 September.

“Anyone who has been on furlough this year has already cost their employers money – so their employers must be keen to keep them on. It’s not surprising that they are not being made redundant in large numbers,” Xu told the BBC.

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The HR1 planned collective redundancy data covers England, Scotland and Wales.

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Rob Moss

Rob Moss is a business journalist with more than 25 years' experience. He has been editor of Personnel Today since 2010. He joined the publication in 2006 as online editor of the award-winning website. Rob specialises in labour market economics, gender diversity and family-friendly working. He has hosted hundreds of webinar and podcasts. Before writing about HR and employment he ran news and feature desks on publications serving the global optical and eyewear market, the UK electrical industry, and energy markets in Asia and the Middle East.

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