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Employment law expert reaction to extension of furlough scheme

3rd Mar 21 9:43 am

As the government plans to relax lockdown restrictions, hopefully for the last time, it has remained clear that the pandemic’s ongoing impact on businesses is far from over. To this end, eyes will have all turned to the Chancellor today to announce how he intends to support companies across the UK as we, hopefully, head back to normality.

A significant aspect of today’s Budget is the extension of the furlough scheme, something that has provided a lifeline to businesses across the country since it was originally put in place in March 2020.

The news that it is going on until the end of September will undoubtedly be extremely welcome to many employers, especially those that are still not expecting to open until at least June, such as nightclubs. If all goes to plan, this means that the furlough scheme will remain an option for employers for a few months after restrictions are expected to be lifted entirely on 21 June, which will hopefully help them to slowly bounce back from the major disruption they may have seen.

An interesting development is that, once again, employers will be asked to start contributing to the scheme from July, something that we previously saw introduced last year as the government aimed to wind the scheme down before it was extended.

Whilst this may at first glance be concerning for employers, they should remember that by July, the government is aiming for life to be, essentially, much more normal, and likely anticipate the need to use the scheme will be much diminished. However, whether this means they will start to clamp down on who can actually use it following 21 June does remain to be seen.

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