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What happens after furlough?

end of furlough

This month sees the end of furlough. Even though the Government have on several occasions extended the scheme, this time it seems unlikely to be extended, given the position with vaccinations. However, never say never.

Given that infection levels and hospitalisations remain high, and we enter the winter months, nothing can be ruled out. Perhaps if there was to be any extension of the scheme, given the success of the vaccine and the ability for many people to continue working from home (ONS reported a 37% increase of working adults working from home in 2020), then perhaps we may see it continue, but possibly only in a targeted way. For instance, a continuation of funds to support certain industries, such as hospitality.

However, to be safe, all businesses, regardless of which sector they operate in, should continue to prepare for the ending of furlough. There are several possible options available to businesses:

Furloughed employees return on pre-furlough terms

Refer to your company furlough agreement for managing the return to the workplace. There should be some clause within it about what happens when the time comes for returning. If not, then ensuring that you provide employees with reasonable notice.

From a workplace perspective, consider what they may need to help settle back into the workplace, whether this be training or an induction, especially if they were new to the business just when the pandemic began. Also review any Covid-19 risk assessments and ensure you have explained any adjustments you have made to the workplace and work processes.

Use our free Covid risk assessment tool.

Short-time working

Where the contract of employment allows, short-time working is a temporary option where the employee works reduced hours and has their pay reduced accordingly. This can be helpful if it is still unclear after Furlough, as to the extent of work that will become available. As this is a fundamental change to an employee’s terms and conditions of employment, an employer needs to have the legal right to implement this by having a specific clause in the contract of employment. Even with this clause, consultation with the employee should still take place and reasonable notice being provided before the reduced working takes effect.

Statutory layoff

Again, if the contract of employment allows, you have the option of implementing a statutory lay off period, which again, is for short-term needs, when it is unclear as to whether the work will pick up. This is a form of leave that would see those employees who have over one month service become eligible for statutory government payment of £30 per day for 5 days in any 3-month period.  As with short-time working, you would need to provide some consultation with the employee and appropriate notice before the leave comes into force.

What if the contract does not allow for short-time or statutory lay off?

If you do not have the legal right to introduce either short-term working or statutory layoff but want to attempt to use these mechanisms instead of making compulsory redundancies, you would need to consult with your staff to seek their written consent and agreement as you are seeking to change their terms and conditions of employment. This would present greater risk as a failure to consult or to not do so properly, risk constructive dismissal claims/breach of contract claims.

Ending furlough and asking employees to take a period of unpaid leave

If the business needs further time for normal operating conditions to resume, then this may be something that could be explored. It would be a voluntary basis asking for volunteers.

Company equivalent furlough scheme

Another consideration is whether it could be financially viable for the business to adopt its own financial scheme, which would kick in once furlough ends. The purpose of which would be to keep hold of your employees whilst the business returns to normal operation. In effect it would be an extension to their current furlough absence however a new agreement would need to be sought to continue with a new form of furlough.


Of all the options, this is a permanent one. For many businesses, furlough will have delayed redundancies from taking place and now with it ending, the question of whether a redundancy situation will arise needs examining. Remember, a redundancy situation is either when:

  • an employer ceases to carry on the business in which the employee was employed;
  • ceases to carry on that business in the place where the employee was employed;
  • the needs of the business for employees to carry out work of a particular kind cease or diminish; or
  • the needs of the business for employees to carry out work of a particular kind in the place where the employee was employed cease or diminish.

Further advice

If you decide to make redundancies, we recommend seeking qualified advice from a HR expert who can fully support you with the process.

Our team of HR Consultants and Advisors is on hand to assist with any changes with may arise as a result of the end of furlough. Contact Us for help and support.

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