Despite the last-minute extension of the furlough scheme, new research conducted among UK business leaders has revealed that great concern remains around making redundancies and in particular the legal risk.
Over a third (34%) say they worry about not following a fair and compliant process, potentially resulting in unfair dismissal or discrimination claims. This is greater than the 28% who said their biggest concern is breaking bad news to people and the personal impact on them.
The survey of over 440 UK business leaders, conducted by employment law and HR support firm Ellis Whittam, also found two-thirds (66%) believe the prospect of making redundancies has negatively impacted their mental wellbeing.
According to the Ministry of Justice, a big rise in employment tribunals is predicted once the furlough scheme ends. In recent official statistics showing tribunal claims surged during the first lockdown period this year, they commented that: “This rise in employment receipts is likely to continue as the government’s job retention scheme comes to an end at the end of October.” While the furlough scheme has since been extended into the spring, it remains a difficult time ahead for many business leaders.
Employers potentially face a huge challenge, as since 2017, there has been no cost to the employee to raise a claim.
James Tamm, Director of Legal Services at Ellis Whittam, said: “In an environment where redundant employees don’t think they will get another job quickly, and in an increasingly litigious culture, employers are bound to face more and more time spent dealing with claims from employees that are trying to get money from every potential source. This stands to put even more stress on business leaders and their organisations.”
The research also found that more than half (52%) of business leaders are unsure whether their affected employees will find another job, given the state of the economy and how things are in their sector.
59% said clarity and consistency of guidance from government, or more certainty over the wider economic impact of Brexit and the future of furlough, would help them to feel more confident.
“Besides the tremendous difficulty redundancies will put on more households, we can’t forget this country’s SME business leaders, who are the lifeblood of so many industries,” added James Tamm. “The UK economy is built on such companies and many of these leaders have strong personal ties to not only their business but also the people they employ and, in many cases, will now be having to make redundancies. With all the pressures of the current crisis we need these SME business leaders to lead the charge of recovery. We as a nation can’t afford for them to feel mentally jaded, yet two thirds of them are telling us that they are.”