Life after furlough: Redundancy, new jobs and pay information
We’re coming to the end of seven weeks under lockdown and we’re expecting the Prime Minister Boris Johnson to announce on Sunday easement of the measures.
At the same time, Chancellor of the Exchequer Rishi Sunak, has said the furlough scheme (Coronavirus Job Retention Scheme) isn’t sustainable and is reportedly looking at cutting it back to 60% of wages before whittling it down in increments so people head back to work.
But what does this mean for the millions of people who are furloughed in terms of their contracts and pay?
In our latest furlough Q&A, Kate Palmer, associate director of advisory at Peninsula, answers your questions…
Q) What happens to workers who were made redundant and then furloughed by the company, once the furlough scheme ends?
A) Employees taken back on in order to furlough them will have the same employment rights as any other employee, meaning that their employment will need to be terminated according to normal rules, including notice periods.
Q) Workers whose new jobs fell through as a result of coronavirus who were then furloughed by their former employer… can they be re-hired by the former employer?
A) The ‘old’ employer will decide whether to re-hire any employees who had already left; it is entirely their choice. The date that they left the old employer will be significant because there are strict rules on eligibility for the furlough scheme when being re-hired depending on when the employee left.
If employees stopped working for the firm on or after 28 February 2020, they can be re-employed, put on furlough and employers can claim for their wages from the date in which they were furloughed, even if they’re not re-employed until after 19 March 2020. They must have been on the payroll as at 28 February 2020, which means an RTI (real time information) submission notifying payment in respect of that employee to HMRC must have been made on or before 28 February 2020.
If employees stopped working for the firm on or after 19 March 2020, they can be re-employed, put on furlough and employers can claim for their wages through the scheme from the date in which they were furloughed. They must have been employed on 19 March 2020 and on the PAYE payroll on or before 19 March 2020. This means an RTI submission notifying payment in respect of that employee to HMRC must have been made on or before 19 March 2020.
Q) Once people go back to work, will they see any change in pay or given new contracts?
A) Terms and conditions, including working hours and pay etc, can only generally be changed after following a process to obtain the employee’s agreement. This means that employees should generally be made aware that the employer wants to make a change and give their agreement. Pay will not automatically alter because of Covid-19, and employers will need to undertake the correct process to achieve change.