The triple impact of Brexit, Covid and the Suez blockage has led to a major shortage of supplies in the construction industry.
Throughout lockdown, construction is the industry which has kept going, as demand has remained high in both the commercial and residential sectors.
The shortage in the supply of material has resulted in priceincreases, for example timber costs 80% more than it did in November 2020 and steel joists are more expensive because iron ore has gone up by more than 80%. Soft wood is up by almost 100%. Aluminium is up by about a quarter. Copper is up 40%. Plastics up 60%. Paints are up by about a third.
The increase in prices and delay in supply has led to some construction companies having to slow things down until the economy has a chance to recover. What impact does this have on the workforce?
Utilisation of the furlough scheme
The furlough scheme is still available until September 2021 and to avoid redundancies and dismissals, you could use this now. You apply on-line through the www.gov.uk website. Whilst furloughed, the employee receives 80% of their normal wages for hours not worked, up to the cap of £2,500 per month. The government provides a grant to the employer cover this amount.
You, as the employer, will only be asked to cover National Insurance and employer pension contributions which, for the average claim, accounts for just 5% of total employment costs. You will then have the flexibility to bring furloughed employees back to work on a part time basis or furlough them full-time, depending on what work you are able to do. The rules change from 1 July 2021 when you will need to contribute 10%. up to £312.50, for hours not worked. This increases again from 1 August 2021 when you will need to contribute 20%. up to £625. The amount the employee receives remains the same.
Short time working and lay off
If you do not feel the furlough scheme applies to you and you have a short time working and lay off clause in your contract of employment, you could use this now. This could be used for short time working, ie working part of the week to cover the work you have on and pay only for these hours. Or you could do a short term lay off, where you tell your employees there is no work available for a set period. In this instance, it is important to give as much notice as you possibly can and you need to be aware there are maximum periods of lay offs after which time, compulsory redundancy kicks in. Please consult the team at Emphasis HR & Training for advice before implementing short time working or lay offs.
Less than 2 year dismissals
An employee needs 2 years’ service to claim unfair dismissal. Depending on your contract of employment you may be able to follow an abridged process to terminate the employment of employees with less than 2 years’ service. However, it is always worth checking with an expert whether this abridged process can be followed without risk of discrimination/whistleblowing or some other employment protection. If in doubt, contact the team at Emphasis HR & Training at hello@emphasis.uk.com.
Redundancy process
This may be the time to restructure or trim down your teams to cover this lean period so when the industry starts getting back to “normal” you have the best core workforce to grow from. There are many elements to consider when reducing or restructuring your workforce and it is important to follow due process, ie at the very minimum you need to set up; an at risk meeting, individual consultation meetings and a final consultation meeting. Informing people of their right to be accompanied by a work colleague or trade union representative is important in any meeting which could lead to the termination of employment. Also providing the right to appeal and the appeal being heard by someone who has not been involved in the process can be difficult for smaller construction companies. This is where the team at Emphasis HR & Training can help as we can either handle the whole redundancy process for you or hear any appeals if you need another level of independence and rigour.
Training
You may want to use this period of time to reskill or retrain your staff. You can use any period of furlough to invest in training. The team at Emphasis HR & Training are skilled in training people in the construction industry to increase their people management skills. Often construction site staff are skilled on the tools and receive other mandatory training but the area which is often overlooked is people management skills. If you want to take advantage of this opportunity to upskill your team, contact the team at hello@emphasis.uk.com
Whatever your current challenges are, we understand the construction industry and are experienced and able to help. Give us a call on 01794 874232 to discuss any support and advice needed to get you through this difficult climate.
