Redundancy vs furlough?

[Halfarsed16]

My DP is a manager of an organisation that gets the majority of their income from festivals/large events - he’s also the main breadwinner.

He’s now been made redundant as the company has gone into ‘survival’ mode with 35% of employees been let go as they’re forecasting no income until next spring.

We also have someone in our household who needs to be shielded therefore retail/warehouse is out of the picture.

I don’t understand why the company cannot put him on furlough for three months even if there’s no job for him at the end? At least that means we cut all of our expenses down and could potentially survive for maybe five months instead of zero income from tomorrow?

With our family being ‘shielded’ I’ve been obsessed with researching keeping her safe and money has been at the back of our minds hence why I’m absolutely clueless of what’s going on.

Hi personally I would get your husband to call his employees and advise they have a social responsibility to put their workers on furlough at absolutely no cost to themselfs , I don’t understand why they have chosen to do this it’s disgusting when there is clearly help available for them to retain staff for at least even till the end of May 2020 when they can reassess the situation and make further considerations, if they don’t do this I would name and shame them, it’s worth a try your hubby asking them first though
Good luck hope they change their mind x

I’d encourage him to call up and request furlough too. Worth a try

As an employer that has had to furlough staff, I'm extremely worried about what the long term implications of furlough are going to be.

That money isn't going to be a gift. There simply isn't enough information out there for employers.

There is a cost, the longer someone is on the books, the more redundancy pay is due to them, as well as other financial elements.

I think the problem is the government have announced this scheme, but have already said they scheme won’t be open till late April. No details of how quickly grants will be paid etc. So for many employers they’ve still got to pay 80 per cent end of the month and no idea when the money will come back in. If your business is short on cash then potentially they can’t feel they can’t even absorb those costs.

Would employers still have to pay Employers NI too if they furlough staff? So there will be a cost?

The scheme could end up costing employers more money than if they just made their employees redundant especially if they know the business will not be back up and running as soon as the lockdown is lifted. For example, employees are furloughed for 8 weeks, then made redundant. The employer has to pay additional redundancy to them for the time they were furloughed.

Would employers still have to pay Employers NI too if they furlough staff? So there will be a cost?

No, the govt will also pay employers the NI and minimum pension costs on top of the 80%

@JaneEyre7

www.gov.uk/guidance/claim-for-wage-costs-through-the-coronavirus-job-retention-scheme

The money is a grant, not a loan.

Op, I’d advise to claim for benefits ASAP. There will be reason the company has done this, likely due to redundancy pay, holiday entitlement etc and cash flow. So they are unlikely to change their mind. He should ask but they will know they can furlough, looked into it and decided against. They are likely furloughing the other staff they are keeping.

Isn't redundancy pay calculated on complete years of service, rounded down? So unless someone crossed their employment anniversary during furlough how would it increase redundancy costs by keeping someone for a few months?

www.turn2us.org.uk/Benefit-guides/Facing-redundancy/Will-my-redundancy-pay-affect-my-benefits-entitlem

Some info on redundancy pay.

I think because furlough for hospitality and social staff could likely go on for six months, and then you’ve got lieu of notice, holiday pay etc, it could easily impact the payment amount.

I think by letting the ops husband go it lets him claim benefits immediately depending on how much he is due. It seems as they are keeping two thirds of the staff, they do not foresee a role for him in the future. Otherwise they would indeed furlough.

Op how long has he been there? It does seem unusual they are letting the manager go, you’d think of the two thirds of staff being retained he’d be key, as they will need a manager in the future.

Is there a back story here?

Advice from Martin Lewis is to fight it: twitter.com/MartinSLewis/status/1244282589227241472

Thank you all for your replies.

It looks like he will be made redundant as the company doesn’t have the finances to cover his salary (as they’ll have to wait for the government to pay them back). Also it looks unlikely the company will be making much money in the next 12 months.

It’s a pretty shit time.

@StrawberryBlondeStar the scheme is open, but first payments won't be made until the end of April. Employers are expected to pay March's wages and then they should receive April's wages and be reimbursed for March.

@MrsL2016 yes the scheme is “open”, but want I meant is you can’t access the cash yet. So as you say you had to pay March’s payroll and potentially April and then claim money back. Many businesses won’t have the cash flow to do this and hence why some people will still be made redundant.

the scheme is open, but first payments won't be made until the end of April. Employers are expected to pay March's wages and then they should receive April's wages and be reimbursed for March

The website wont be running until the end of April- so it isn't open.