Warning of widespread redundancies as furlough ends
A report by the University of Leeds says nearly half of the managers surveyed, have delayed inevitable redundancies because of furlough
Last updated 29th Sep 2021
There's warnings there could be a rise in redundancies as furlough ends today.
The government has been paying the wages of people who couldn't work due to the pandemic and for those whose employers couldn't afford to pay them.
In April it paid 80%. From August it has paid 60%, whilst employers pay 20%.
The most recent data from July 2021 suggest 1.6 million are still on furlough.
Will unemployment rise?
A report by the University of Leeds warns of 'a significant risk of widespread redundancies when it ends on 30 September 2021'.
It says that managers used furlough during the pandemic as an alternative to making staff redundant.
It said:
"Just under half of managers surveyed reported that the CJRS had delayed inevitable redundancies, with workers returning from furlough either likely to lose their jobs or to experience cuts in pay or hours. Just under half of surveyed managers said that the government should provide ongoing support for staff retention or focused support for those workers made redundant."
The report, ‘Furloughing and the Coronavirus Job Retention Scheme (CJRS) in the UK: managers experiences and perspectives’, made three key recommendations:
- A long-term furlough scheme should be introduced, supported through appropriate employment legislation and high level dialogue between key labour market actors. This should be modelled on international examples of best practice, notably long-standing short-time working schemes.
- Businesses should be encouraged to use furloughing as an alternative to redundancy and to adopt job retention as a long-term human resource management (HRM) practice. This should be supported by bodies such as ACAS and the CIPD, through good practice codes and guidance for employers.
- The government should introduce a post-Covid-19 employment recovery plan that not only includes support for education and training, but a comprehensive programme of support for workers made redundant as a direct result of the Covid-19 crisis. A recovery plan should be built on new social partnerships and should allow for a ‘levelling up’ in labour standards.
- Commenting on the cut to universal credit and termination of the furlough scheme, TUC Yorkshire & Humber Regional Secretary Bill Adams said:
- “Rishi Sunak is leading us into winter without a plan to protect working people and rebuild Yorkshire’s economy.
- “The cost of living is rising fast, but ministers are determined to cut vital universal credit support. They must cancel the cut to help keep families warm and fed through the winter ahead.
- “The Chancellor should rethink the end of furlough. Many workers in hard hit industries are still furloughed and need support for longer. Otherwise, we may see a rise in unemployment.
- “For the Chancellor to jeopardise jobs in his own region like this is astonishing”
- The TUC has called for the government to establish a permanent short-time working scheme to help protect working people through the ongoing economic changes due to the pandemic – especially in hard-hit industries. And such a scheme would also protect jobs through the transition to a net-zero economy.