Many small businesses are taking advantage of the Governments new Job Retention Scheme and placing staff on ‘furlough’ at 80% of salary, reclaimable through HMRC. It’s a good way to cope with having to close down operations or significantly scale them back without having to make staff redundant – you can keep hold of your workforce knowing they are paid at least something until things pick up again.
But many businesses don’t need to furlough everyone; they need a skeleton staff, either to keep operational on a smaller scale, or just to keep things like payroll and other administration happening while normal services are ‘mothballed’.
If you don’t have to furlough everyone, how do you decide who to keep and who to place on furlough? There are five key issues to remember;
- There is no established formal process. This is a completely new thing, although it is similar to the concept of unpaid lay-off commonly used in some industries. So unlike redundancy, there is not a well-established fair procedure that must be used, or selection criteria you can rely on as being lawful and fair.
- Because you are not dismissing anyone, you don’t have to be overly concerned about unfair dismissal claims.
- Unlike redundancy, it is entirely likely that many if not all of your workforce may want to be furloughed. So you’re selecting people for what may be perceived as a positive rather than negative thing.
- You are probably in quite a hurry so lengthy selection procedures, skills assessments or scoring processes are probably unrealistic.
- Discrimination laws will still apply so be very careful that whatever selection method you use could not be argued as being discriminatory on the basis of one or more protected characteristic.
With those issues in mind we would recommend the following:
- Consider first which jobs you most need to keep going, and how many of each job.
- Contemplate prioritising anyone with caring responsibilities, vulnerable people or those with poor health. There is a risk of age discrimination against younger workers if a high proportion of vulnerable category are older, however discrimination with a legitimate aim is acceptable, and in these circumstances that will be ok.
- Ask for volunteers (making sure you are clear first that there is no guarantee volunteers will be selected) – this may be a useful starting point and might rule out some people.
- If you have lots of people in similar situations doing the same job, consider literally drawing names out of a hat or another completely random selection process.
- Consider rotating workers on and off furlough. Furlough periods must be for at least three weeks, so if you want to rotate, and have some workers come back and take turns, you’ll need to bear in mind how long this may last. The Government has currently said three months but it may be extended if necessary.
If you need further advice on how to choose staff to furlough, do get in touch.