Summary of the Scheme
The Coronavirus Job Retention Scheme (CJRS) was introduced by the Government on 20 March to assist businesses who were impacted by Covid-19. This allowed employers to “furlough” their employees and make a claim from HMRC for 80% of their wages (limited to £2,500 per month) to be passed to the employee. The purpose of this scheme was to retain employees and avoid redundancies, so that once business picked back up the employees could recommence their role. Due to upcoming changes to the scheme, it is predicted that a lot of employers will look to make redundancies.
Redundancy during furlough – Your Rights
It is possible for your employer to make you redundant whilst you’re on furlough leave, however it is important that your employer still complies with the usual requirements for making redundancies in order to ensure that the dismissal is lawful. Recently, there has been much confusion around the calculation of notice pay for those on furlough leave being made redundant. The impact of getting this wrong is that it can result in the dismissal being wrongful and you having the right to bring a claim.
The position in relation to notice pay during furlough is complex and depends on the specific circumstance. Some examples are as follows:
If you are given a payment in lieu of your notice as authorised by your contract of employment, the first thing to do is check whether the contract states an amount that is payable. If it refers to being based on ‘basic pay’, then it is likely that the sum should be calculated based on your basic pay prior to being furloughed.
If your contractual notice period is at least 1 week more than the statutory minimum, say for example your contract provides for 4 weeks’ notice whereas you have only worked for the company for 3 years (and therefore would only be entitled to 3 weeks’ notice if not for the contract), you are only entitled to be paid notice at your furlough rate of pay for all weeks of your notice period that you are furloughed for, rather than being paid 100% of your salary for those weeks. For every full year you have worked for your employer, you are entitled to a week notice under law, up to a maximum of 12 weeks. This is used where your contract provides for less than the statutory minimum.
If your contractual notice period is only 6 days or less above the statutory minimum and you would ordinarily work normal hours (such as the same hours each week), your notice pay must be calculated using your pre-furlough pay, as the relevant legislation refers to calculating notice based your ‘normal working hours’. Evidently, you are unable to work whilst furloughed as a requirement of the scheme, so this can only apply to pre-furlough hours. This will apply where you are ready and willing to work but no work has been provided, you are incapable of work because of sickness or injury, or you are absent from work due to pregnancy, childbirth, parental leave or due to taking annual leave. The position is slightly different where you work irregular hours. If you specifically requested to be place on furlough leave, for example if you had caring responsibilities, it is arguable that you should be paid notice pay at the reduced furlough wage. This is because you are considered to be not ready and willing to work.
As is apparent, the provisions regarding the amount of notice payable if you are made redundant whilst on furlough leave are quite complex, which is why you should seek legal advice if you find yourself in this situation. It is also key to consider whether your dismissal was fair or unfair, and whether it is in fact for redundancy purposes or for a different reason, masked as redundancy. It should also be noted that your statutory redundancy payment would be calculated in a similar way to your notice pay, depending on your situation.
When to take advice
If your employer has made you redundant or is proposing to, we recommend that you seek legal advice without delay, especially if you feel as if there is some underlying reason for your dismissal.
Here at Winrow Solicitors, we are experts in Employment Law, and will be able to manage any matter from initial instruction all the way through to Tribunal if necessary. If you have been affected by anything discussed above, please contact us on 01286 872779 or send us a message on our website or Facebook page and we will be able to advise you on your situation.