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COVID-19 impact on employment: Redundancy at highest level since 1995

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COVID-19 impact on employment: Redundancy at highest level since 1995

The COVID-19 pandemic’s significant impact on the labour market has led to the highest levels of redundancy since records began in 1995.

On 18 December 2020, the House of Commons Library published a briefing paper detailing the economic impact the COVID-19 pandemic had on the labour market in the UK between August and October 2020.

The paper demonstrated that there has been further increase in both unemployment and redundancies, continuing the trend set earlier in the year when the pandemic first struck the UK.

UK redundancy figures at record high

Redundancies have increased by 217,000 from the previous quarter and 251,000 from the previous year, to 370,000. The largest number of redundancies have come in the wholesale, retail and repair of motor vehicles sector, which has seen 68,000 redundancies alone. The manufacturing sector follows this with 55,000 redundancies.

The report also raised a number of other talking points concerning the overall impact on the labour market. It was reported that employment levels for people aged 16 and over have fallen by 484,000 and the number of people aged between 16 and 64 who are economically inactive has risen by 145,000.

The number of people claiming unemployment related benefits has also increased by 1.4 million between March 2020 and November 2020.

It was noted that, despite these high figures, the pandemic has not resulted in the expected increase in unemployment. Much of that has been down to the government schemes in place, such as The Coronavirus Job Retention Scheme (more commonly known as the Furlough Scheme), which means furloughed employees are still classed as employed. It was reported that 3.8 million people were on furlough at the end of December.

How Long Will Government Support Schemes Last?

The Furlough Scheme was due to finish in October 2020, but the start of the second nationwide lockdown saw it extended for a further five months to 31 March 2021. On 18 December, it was further announced that the scheme would be extended until 30 April 2021.

There has been growing concern that redundancy and unemployment figures could increase further, even after the pandemic has subsided. Support schemes such as the Furlough Scheme have prevented some companies from having to make redundancies and, without that support, some companies may not be able to maintain their entire workforce.

Chancellor Rishi Sunak has previously warned that the number of unemployed people in the UK is expected to rise to 2.6 million by mid-2021, which could indicate that there are still difficult times on the horizon for UK businesses.

There has been no clear indication as to what support will be available for businesses when the Furlough Scheme ends, which could mean that redundancies are the only option for many businesses to survive.

How Our Employment Law Solicitors Can Help

With the effects of the pandemic set to continue well into 2021, businesses up and down the country are increasingly relying on permanent home working solutions to help run at the maximum possible capacity.

Our Employment team have specialist expertise in helping businesses create sustainable working from home solutions, which will help to reduce the need for potential redundancies or unemployment.

We can advise on a wide range of home working matters, ensuring that your business still complies with various employment laws and regulations. Our home working expertise includes but is not limited to:

  • Employment contract advice
  • Cyber Security and Data Protection
  • Minimising the risk of discrimination claims
  • Complying with health and safety regulation
  • Supplying equipment
  • Insurance considerations
  • Employment disputes related to remote working

Our employment law specialists also work closely with our wider Commercial Law team to provide a wide range of advice to businesses, on matters such as commercial property, restructuring and more general contracts advice.

We have also previously published a number of useful employment blogs which you can review:

Contact Our Employment Specialists in Bournemouth, Poole, Christchurch, Ringwood and the New Forest

We have offices in Christchurch and Ringwood. Our Employment team also covers Bournemouth, Poole, Ringwood and the New Forest, with the majority of our clients located in the Bournemouth and Poole area.

We are happy to offer a free 30-minute consultation for all new clients to discuss your needs and recommend a course of action.

Give us a call or fill in our online enquiry form for a quick response.

The content of this article, blog or video is not intended as specific legal advice. For tailored assistance, please contact a member of our team.