20th March 2020

Is financial help available?

In these testing and worrying times, many employers in the first instance will be thinking about whether they can place employees on lay-off or short-time working.

If, however, lay-off or short-time working is not an option – either because the employer cannot obtain agreement from employees (as there is no express term in their employment contract) or because the employer believes that the situation will be more permanent, – then some employers may have no option but to make staff redundant. In this case, help may be available via the Financial Assistance scheme (“FAS”).

Financial Assistance Scheme

The Financial Assistance Scheme, run by the Government’s Redundancy Payments Service, can assist employers by significantly reducing the cash flow impact of redundancies on their businesses.

In addition to agreeing a payment plan in advance, there are specific criteria, set out below, which need to be met before the Redundancy Payments Service will agree to make the redundancy payments on the employer’s behalf:

  • The Company (and other group companies) lack the funds to pay the redundancy costs.
  • The Company’s bank won’t fund the redundancies.
  • The action will help save a significant number of jobs/or secure the solvency of the business.
  • The Company will be able to repay the money within an agreed timeframe (usually 12 months).

If this is something which may be of assistance, we would suggest speaking to your accountant in the first instance. It is worth bearing the above in mind and investigating if your business might be eligible to benefit from this scheme in the event that redundancies need to be made.

If you do have any questions in relation to the process involved when dealing with redundancies, please contact any member of the employment team who will be happy to help.

If you have any concerns about your workforce and redundancies, our employment team are here to help you make the right decisions during this  difficult period. Please call 0113 849 4000 or email employment@schofieldsweeney.co.uk.

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