Personnel Today
  • Home
    • All PT content
  • Email sign-up
  • Topics
    • HR Practice
    • Employee relations
    • Learning & training
    • Pay & benefits
    • Wellbeing
    • Recruitment & retention
    • HR strategy
    • HR Tech
    • The HR profession
    • Global
    • All HR topics
  • Legal
    • Case law
    • Commentary
    • Flexible working
    • Legal timetable
    • Maternity & paternity
    • Shared parental leave
    • Redundancy
    • TUPE
    • Disciplinary and grievances
    • Employer’s guides
  • AWARDS
    • Personnel Today Awards
    • The RAD Awards
  • Jobs
    • Find a job
    • Jobs by email
    • Careers advice
    • Post a job
  • Brightmine
    • Learn more
    • Products
    • Free trial
    • Request a quote
  • Webinars
  • Advertise
  • OHW+

Personnel Today

Register
Log in
Personnel Today
  • Home
    • All PT content
  • Email sign-up
  • Topics
    • HR Practice
    • Employee relations
    • Learning & training
    • Pay & benefits
    • Wellbeing
    • Recruitment & retention
    • HR strategy
    • HR Tech
    • The HR profession
    • Global
    • All HR topics
  • Legal
    • Case law
    • Commentary
    • Flexible working
    • Legal timetable
    • Maternity & paternity
    • Shared parental leave
    • Redundancy
    • TUPE
    • Disciplinary and grievances
    • Employer’s guides
  • AWARDS
    • Personnel Today Awards
    • The RAD Awards
  • Jobs
    • Find a job
    • Jobs by email
    • Careers advice
    • Post a job
  • Brightmine
    • Learn more
    • Products
    • Free trial
    • Request a quote
  • Webinars
  • Advertise
  • OHW+

Collective redundancyZero hoursLatest NewsFurloughJob Support Scheme

The end of furlough: what does it mean for employment?

by Charlie Thompson 27 Sep 2021
by Charlie Thompson 27 Sep 2021 Photo: Monkey Business/Shutterstock
Photo: Monkey Business/Shutterstock

A growth in zero hours and short-time working, plus a rise in unfair dismissal claims, could be among the impacts from the cessation of the furlough scheme on 30 September, argues Charlie Thompson, employment partner at Stewarts.

With the end of furlough on 30 September it does not take a great deal of foresight to predict there is likely to be a further wave of redundancies.

In recent months, redundancy figures have been relatively low. Indeed, in August 2021, they were at their lowest level in seven years. This is likely to be because many employers had already made large scale redundancies in the past 18 months and have no appetite to do a fresh round of morale-sapping job cuts if they can possibly avoid it.

When chancellor Rishi Sunak unveiled the furlough scheme in March 2020, he said it would be open for an initial three months. Since then, it has been repeatedly extended, and the cost to employers of keeping staff on furlough has incrementally increased.

Against that backdrop, many employers contemplating job cuts will have carried out their redundancy exercises already. However, the number of redundancies will surely increase when the furlough scheme ends. Recent provisional figures show 1.6 million furloughed employments on 31 July 2021. The Resolution Foundation predicts that about 1 million people will still be on furlough on 30 September.

With the furlough scheme coming to an end, some employers face the choice between bringing their furloughed staff back in, potentially to do very little work, or to make them redundant. Furthermore, despite the success of the vaccination programme and the relaxation of restrictions, many businesses will continue to be affected by the pandemic, logistical and travel problems, and the harsh economic conditions that will outlast the furlough scheme.

Furlough and redundancy

Businesses could face welter of fraud probes once furlough ends

Redundancies continue to fall in face of furlough finale

British Airways warns of steep rise in staff costs after furlough

Good practice: Managing the information and consultation process during a collective redundancy

Wind up orders

It’s also the case that at the end of September 2021 creditors will be free to seek orders to wind up debtors who owe them money. Some employers will be compelled to make redundancies to stay afloat, whereas others will go out of business altogether, with job losses inevitably following.

Any employer conducting a redundancy consultation should not be complacent that the end of the furlough scheme makes the exercise simpler. Employees may now point to the success of the furlough scheme in avoiding redundancies and, while recognising that the scheme is at an end, propose lay-off or short-term working to avoid redundancy.

Employers will need to consider these proposals carefully. In practice, the value of most unfair dismissal claims arising from redundancy will be heavily influenced by the dismissed employee’s ability to secure another role. The more likely an employee is to secure another role quickly, the less it is worth their while bringing a claim.

According to the latest labour market overview from the ONS, the number of payroll employees is now returning to pre-pandemic levels and the number of job vacancies is above 1 million, the highest since records began.

However, employers should not assume that this means that the risk of claims is low. The surge in vacancies will not be evenly distributed across the economy. Employees made redundant by companies because of the furlough scheme’s closure are likely to find that companies in the same sector will not be embarking on a recruitment spree.

More zero-hours contracts?

In July 2020, HM Treasury introduced the concept of flexible furlough. This allowed employers to bring furloughed employees back to work on a part-time basis and give the employer flexibility to decide working hours and days. Employers could also re-furlough employees who had come back to work. There will be employers that have enjoyed the ability to determine staff hours according to fluctuations in activity (and not just in the gig economy sectors).

They may also be concerned that trading conditions will continue to be difficult from 1 October 2021 onwards. Those businesses may revisit their attitude towards zero-hours contracts, which provide the employer with similar flexibility. Employers will also seek to sell the benefits of such contracts to candidates by showing that they also give the employee flexibility.

Another phenomenon we may see is the increase of “lay off” and “short-time working” provisions in employment contracts. Employment contracts can lawfully contain provisions entitling the employer to either provide no work (and no pay) or less work (and less pay) for a period while keeping the employment alive. We may also see more businesses engaging individuals as freelancers or independent contractors, rather than as employees.

A commonly misunderstood feature of the gig economy cases, such as Uber, is that although the judicial trend is firmly in favour of giving individual employment rights, none of those high-profile decisions have gone as far as providing protection against unfair dismissal. Employers who are scarred by recent redundancy exercises may prefer to lessen the risk of conducting further redundancies by engaging independent contractors instead, in the belief that they can hire and fire them at will.

Sign up to our weekly round-up of HR news and guidance

Receive the Personnel Today Direct e-newsletter every Wednesday

OptOut
This field is for validation purposes and should be left unchanged.

Although the furlough scheme is at an end, HMRC will continue to investigate incorrect furlough claims as the government looks to recoup a suspected £7bn of fraudulent or erroneous Coronavirus Job Retention Scheme (CJRS) claims.

HR Director opportunities on Personnel Today


Browse more HR director jobs

Charlie Thompson

Charlie Thompson is employment partner at Stewarts law firm.

previous post
Kevin Green returns to HR in First Bus role
next post
Former SOM president: ‘I was eating, sleeping, dreaming Covid’

You may also like

Five years on: how has work changed since...

12 Mar 2025

Tax fraud whistleblowing rises by 70%

14 Oct 2022

Nearly 14,000 whistleblowing reports of furlough fraud received...

11 Aug 2022

‘Low flight risk’ designer wins £100k age discrimination...

5 Jul 2022

How to respond to an HMRC furlough enquiry

18 May 2022

P&O Ferries told to return £11m furlough money...

28 Apr 2022

Single parents need urgent support to re-enter work

11 Mar 2022

MPs press HMRC to recover furlough funds lost...

11 Feb 2022

Nursery worker dismissed while pregnant was discriminated against

7 Feb 2022

Treasury writes off three-quarters of Covid support grants...

17 Jan 2022

  • Empowering working parents and productivity during the summer holidays SPONSORED | Businesses play a...Read more
  • AI is here. Your workforce should be ready. SPONSORED | From content creation...Read more

Personnel Today Jobs
 

Search Jobs

PERSONNEL TODAY

About us
Contact us
Browse all HR topics
Email newsletters
Content feeds
Cookies policy
Privacy policy
Terms and conditions

JOBS

Personnel Today Jobs
Post a job
Why advertise with us?

EVENTS & PRODUCTS

The Personnel Today Awards
The RAD Awards
Employee Benefits
Forum for Expatriate Management
OHW+
Whatmedia

ADVERTISING & PR

Advertising opportunities
Features list 2025

  • Facebook
  • Twitter
  • Instagram
  • Linkedin


© 2011 - 2025 DVV Media International Ltd

Personnel Today
  • Home
    • All PT content
  • Email sign-up
  • Topics
    • HR Practice
    • Employee relations
    • Learning & training
    • Pay & benefits
    • Wellbeing
    • Recruitment & retention
    • HR strategy
    • HR Tech
    • The HR profession
    • Global
    • All HR topics
  • Legal
    • Case law
    • Commentary
    • Flexible working
    • Legal timetable
    • Maternity & paternity
    • Shared parental leave
    • Redundancy
    • TUPE
    • Disciplinary and grievances
    • Employer’s guides
  • AWARDS
    • Personnel Today Awards
    • The RAD Awards
  • Jobs
    • Find a job
    • Jobs by email
    • Careers advice
    • Post a job
  • Brightmine
    • Learn more
    • Products
    • Free trial
    • Request a quote
  • Webinars
  • Advertise
  • OHW+