2020 has been a difficult year for many people. Individual financial concerns have heightened due to business closures, job losses, and reduced income. In November, a total of 9.6 million people in the UK were on furlough as part of the Coronavirus Job Retention Scheme.
If you have been put on furlough it is likely that you were paid less than your usual monthly wage due to employers only having to pay 80% of your usual earnings. Job insecurity is one of the biggest concerns for furloughed employees. Unfortunately, as businesses adapt their practices and procedures in response to the Coronavirus pandemic, part of this response may include making redundancies.
According to the Office for National Statistics, redundancies hit a record high of 370,000 in the three months leading to October 2020. It is expected that this redundancy rate will continue to increase over the next few months.
If you have been made redundant after furlough, this article will help you understand your employment rights and share advice on what you should do when you are made redundant.
What is the furlough scheme?
The Coronavirus Job Retention Scheme, commonly referred to as the furlough scheme, was set up by the Government to help businesses respond to the economic consequences of Coronavirus and related lockdown measures. Starting in March 2020, the Coronavirus Job Retention Scheme has currently been extended until the end of March 2021.
This scheme allows businesses throughout the UK to ‘furlough’ employees, placing them on a paid temporary leave of absence. There have been several iterations of the furlough scheme. The most recent phase of the scheme provides support for salaries at 80% up to the maximum of £2,500. Employers can claim furlough grant for employees who have been employed on or before 30 October 2020, as long as a PAYE submission has been made for that employee.
Employers can choose to furlough employers for any amount of time or work pattern. Whilst furloughed, however, employees are not permitted to work or undertake any work-related training.
What is redundancy?
Redundancy is a type of job dismissal. However, it is not the same as being ‘fired’ from your job. Redundancy occurs when a business needs to reduce their workforce. The selection process for redundancy must be done in a fair way. Some commonly used methods of selection include last in, first out, asking for volunteers, experience and capability.
Reasons that would not be considered a fair basis for selection include:
- sexual orientation
- maternity leave, birth, or pregnancy
- working pattern
To ensure that employees are not unfairly dismissed from their jobs, there are some rights to protect you, the employee, in the event of redundancy.
New rules relating to redundancy after furlough
Although you can be made redundant while furloughed, the same rules regarding fair selection for redundancy still apply. The Government have brought into effect a new law that ensures furloughed employees will receive statutory redundancy pay based on their normal wages, not the reduced furlough rate.
This legislation change will make sure that any employees made redundant following the Coronavirus Job Retention Scheme will not be short-changed by their employer. This new law will hopefully provide some reassurance and protection for affected individuals during this difficult time.
What are your redundancy rights?
So, what are your rights when you are made redundant? When it comes to being made redundant, your employer must follow a strict process before making redundancies. Your redundancy rights will not have changed because of the coronavirus crisis and, therefore, it is important that your employer does not attempt to use this as a means of unfairly dismissing you from your role.
If you have been made redundant, your redundancy rights state that you may be eligible for the following things:
- redundancy pay
- notice period
- a redundancy consultation with your employer
- the option to move into a different job
- time off to find a new job
If you have been with your employer for 2 or more years, they should pay you statutory redundancy pay (or the redundancy pay outlined in your contract if it is higher). Statutory redundancy pay is calculated as:
- half a week’s pay for each full year you were under 22
- one week’s pay for each full year you were 22 or older, but under 41
- one and half week’s pay for each full year you were 41 or older
Your employer also cannot make you redundant on the spot. They are required by law to give you a statutory redundancy notice period or, if it is higher, to give you the notice period outlined in your contract. The statutory redundancy notice period is:
- at least one week’s notice if employed between one month and 2 years
- one week’s notice for each year if employed between 2 and 12 years
- 12 weeks’ notice if employed for 12 years or more
The only exception to a redundancy notice period is if your employment contract states that your employment can be ended without notice if ‘payment in lieu of notice’ is provided. In this case, your employer should provide all the basic pay you would have received during the notice period and any extras as stated in your contract.
If your employer has failed to provide you with any of the above, they could be in breach of the legal process for redundancy and you may be able to claim against them for unfair dismissal. These redundancy rights also apply to any employee who works under an employment contract, be it full-time, part-time, on maternity leave or on a temporary contract.
However, you are not legally entitled to statutory redundancy pay if you meet any of the following criteria:
- have worked in your job less than 2 years
- are self-employed
- are a police officer or in the armed forces
- are a Crown servant, parliamentary staff or holder of public office (for example, a Justice of the Peace)
- are a share fisherperson
- are domestic staff working for your immediate family
- are an employee of a foreign government
Whilst the furlough scheme is in place, there are also some additional considerations to keep in mind regarding redundancy. It is important to note that you are entitled to your full salary during your notice period, even if you have received a reduced rate during furlough. The redundancy selection process must also be fairy chosen. If your employer has exclusively selected staff or redundancy based on furlough status, this could be unfair selection. Similarly, the redundancy dismissal could be considered an unfair dismissal if your employer did not fully consider any other alternatives such as keeping you on furlough.
What to do when you have been made redundant?
If you have been made redundant, or fear that you may soon be made redundant following furlough, we have put together the below checklist to help you prepare for redundancy.
When being made redundant, you should:
- Seek help for getting a new job after your redundancy notice period
- See if you are entitled to time off to apply for jobs or attend training
- If your employer will not give you time off to look for work, speak to your HR department (if there is one) and try to make your employer aware that this is a legal right
- Check that you received, or will receive, all the money you are entitled to. This should include any redundancy pay you are entitled to, your final wage, any ‘pay in lieu’, holiday pay or outstanding bonuses, commissions, or expenses you are entitled to
- Make sure that the first £30,000 of your redundancy pay has been provided tax free
- Research what benefits you are eligible for whilst you look for a new job
- Contact your bank or mortgage provider for help with rent or mortgage payments if you are concerned about money following redundancy
- Speak to an experienced employment lawyer if you think you have been unfairly dismissed
Legal support for redundancy
Being made redundant can be both scary and stress. At Ten Legal, we are committed to making the process as easy and stress-free for you as possible. If you are worried that you may have been unfairly dismissed when made redundant following furlough, reach out to our friendly team of employment lawyers. They will be able to advise you on your redundancy rights, what you are entitled to if you have been unfairly made redundant, and how to take action against your employer and be rightfully compensated for unfair dismissal.