Calls to a redundancy helpline almost tripled during June and July compared to last year (2019) as the COVID-19 pandemic continues to damage the UK economy.
Acas, a conciliation service reported that calls made to the Acas redundancy helpline increased by 160 per cent compared to the same time in 2019. Last year saw 12,000 calls made and this year 33,000.
The pandemic has led to numerous major chains making redundancies. Acas has also published updated redundancy advice for employers, telling them to consider alternatives before making staff redundant and calling it a “last resort”. Businesses can implement a recruitment freeze or place a limit on overtime. Companies can also move employees in to other roles that match their skills.
The Government claimed numerous companies have taken advantage of the furlough scheme and paid out redundancy payments based on 80 per cent of an employee’s wage. The legislation announced by the Department of Business, Energy and Industrial Strategy (BEIS) means that if you have been working for your company for at least two years, you are owed full redundancy pay regardless of being furloughed or not.
Susan Clews, chief executive of Acas said:
The economic impact of coronavirus, alongside fears around the furlough scheme tapering off, has left many employers and their staff concerned about their future livelihoods.
Some businesses have found innovative ways to deal with the crisis through restructuring that has allowed them to safeguard jobs in consultation with trade unions.
Our advice in this area recommends alternatives to redundancies, which should always be used as a last resort, as well as how to follow the law if it cannot be avoided.
An aim of the furlough scheme is to help prevent redundancies, however, it has been predicted by the National Institute of Economic and Social Research (NIESR) that closing the furlough scheme at the end of October could result in unemployment reaching 10 per cent this year.