Redundancy during furlough

[Lanacosmo]

Hello everyone,

Unfortunately the current coronavirus pandemic has negatively affected the business, all our events have disappeared for the foreseeable future, our company need to significantly cut our overheads and make most of staff redundant in June in order to survive this crisis

Could we still make employees redundant while they are on furlough, job retention scheme is not clear on their statement regarding that.

Thank you!

 

[Newchodge]

You can start the consultation and issue notice of termination during furlough. You can continue to claim furlough pay througout, but you cannot claim for pay in lieu of notice or the redundancy pay. Notice pay may need to be at 100%, depending on the amount of notice given.

 

[Lanacosmo]

You can start the consultation and issue notice of termination during furlough. You can continue to claim furlough pay throughout, but you cannot claim for pay in lieu of notice or the redundancy pay. Notice pay may need to be at 100%, depending on the amount of notice given.

Thank you, Cyndy, I was informed that notice can be served and claimed while on furlough and anything beyond 80 % 20% topped up by employer.

As an example we worked out: we have a contractual notice of 1 month for for employee who worked 3 years, so we would pay employee statutory minimum 3 weeks in full 100% (80% furlough and 20% will added by employer) and anything beyond is 80%.
is this correct?

 

[Newchodge]

Thank you, Cyndy, I was informed that notice can be served and claimed while on furlough and anything beyond 80 % 20% topped up by employer.

As an example we worked out: we have a contractual notice of 1 month for for employee who worked 3 years, so we would pay employee statutory minimum 3 weeks in full 100% (80% furlough and 20% will added by employer) and anything beyond is 80%.
is this correct?

Not exactly. If the employee has completed 3 years their statutory notice is 3 weeks. If the actual notice given is 4 weeks or less it is all at 100%. If the actual notice is more than 4 weeks it is all at the currently agreed rate of pay. Mad, I know, but that is what it says. (Statutory notice pay + more than 1 week means the employee is not entitled to full pay). Normal furlough pay, as calculated by the proper method, can be claimed.

 

[Lanacosmo]

Not exactly. If the employee has completed 3 years their statutory notice is 3 weeks. If the actual notice given is 4 weeks or less it is all at 100%. If the actual notice is more than 4 weeks it is all at the currently agreed rate of pay. Mad, I know, but that is what it says. (Statutory notice pay + more than 1 week means the employee is not entitled to full pay). Normal furlough pay, as calculated by the proper method, can be claimed.

thank you again!! Hugely helpful! so it means if one of our employees served 8 years, redundancy notice is 8 weeks , we give 2 months notice we would claim 80% during the furlough scheme + any holidays in lieu and don't have to top up 20%

 

[Newchodge]

thank you again!! Hugely helpful! so it means if one of our employees served 8 years, redundancy notice is 8 weeks , we give 2 months notice we would claim 80% during the furlough scheme + any holidays in lieu and don't have to top up 20%

8 weeks is 56 days. 2 months is between 61 and 62 days, that is less than 1 week more than statutory so all at 100%.

 

[Lanacosmo]

Not exactly. If the employee has completed 3 years their statutory notice is 3 weeks. If the actual notice given is 4 weeks or less it is all at 100%. If the actual notice is more than 4 weeks it is all at the currently agreed rate of pay. Mad, I know, but that is what it says. (Statutory notice pay + more than 1 week means the employee is not entitled to full pay). Normal furlough pay, as calculated by the proper method, can be claimed.

thanks Cyndy, but still confusing, why employee with 3 years of service with contractual notice of 1 month will get 80% and not need to top up 20% by employer

 

[Newchodge]

The rule is statutory notice plus 1 week is full pay. A month is longer than 4 weeks, so no entitlement to full pay. 2 months for someone entitled to 8 weeks is not longer than 9 weeks.

 

[Lanacosmo]

The rule is statutory notice plus 1 week is full pay. A month is longer than 4 weeks, so no entitlement to full pay. 2 months for someone entitled to 8 weeks is not longer than 9 weeks.

Thank you for your patience, so, one more, last question (I promise), let say if employee worked 9 years, and contractual notice says "1 week for each completed year of service" notice given 9 weeks from 1st June to 31st July that is exactly 9 weeks, would employer have to top 20% to make 100%?

 

[Newchodge]

Thank you for your patience, so, one more, last question (I promise), let say if employee worked 9 years, and contractual notice says "1 week for each completed year of service" notice given 9 weeks from 1st June to 31st July that is exactly 9 weeks, would employer have to top 20% to make 100%?

Yes.

 

[Lanacosmo]

Yes.

According to Personnel today " if an employee has a garden leave clause in their contract, and they are under notice, they could argue (with some force) that they are entitled to their normal garden leave pay, typically 100%. After all, they are on notice and being told not to do any work for their employer, which is exactly what garden leave is."
"...Second, a tribunal could imply a term that the employee’s agreement to reduce salary to 80% was only while they were not under notice, perhaps because the Coronavirus Job Retention Scheme is there to preserve, not remove, jobs"

how likely tribunals will follow above route, especially for those employees who completed 2 or 3 years of service with 1 month contractual notice and notice payment of 80% rather than 100%

 

[BeauLacey]

You can continue to claim furlough pay througout, but you cannot claim for pay in lieu of notice or the redundancy pay. Notice pay may need to be at 100%, depending on the amount of notice given.

so if using only statutory guidelines,
If we pay notice pay week to week we can use FL? (but top up to full pay)
If we pay PILON we cannot use Furlough

Is there a link to this specific info anywhere?

thanks Cyndy

 

[Newchodge]

so if using only statutory guidelines,
If we pay notice pay week to week we can use FL? (but top up to full pay)
If we pay PILON we cannot use Furlough

Is there a link to this specific info anywhere?

thanks Cyndy

The amount you can claim for furlough in any one pay period is fixed as of 19 March.

Assume you pay 3 months PILON.

The reference pay is £1,000 so the furlough pay is £800.

In one pay period you want to claim 1 month's furlough and 3 month's PILON = £3,200. But the most you can claim is £800.

You cannot claim £800 in each of the 4 pay periods as the employee is not employed after pay period 1.

 

[Talay]

However, if for instance there was a 6 week notice period then surely instead of PILON you could simply let their 6 weeks notice run it's course and you could claim the 80% through the relevant payroll and top up to 100%.