Redundancy, furlough and holiday pay help.

[Verylongweek]

Hi

I wonder if anyone is able to advise. I’ve been furloughed more or less since the start of lockdown. Our entire industry has been closed down (hospitality). Now lockdown is lifting the inevitable redundancies are coming, being middle management mine is one of the first on the list. Final stage next week and it’s highly unlikely I am going to be kept.

I asked for a breakdown of redundancy package. All looks ok (bare min but didn’t expect more). However the 4 bank holidays that have happened are only down to be paid at 20% to top of the 80% we would have been paid for them whilst furloughed.
Is this right? I would have thought if they were treating them as holidays at the time we should have been paid the 100% by the company at the time, not topping it up now?

Also notice pay is only being paid at the 80% furlough rate? Again are they able to do this?

Any advice greatfully appreciated. Every penny of this pay out is going to have to count as unfortunately getting another role within hospitality is going to be near enough impossible so I’ll be looking at taking a big pay cut to work my way up again in a different sector.

I'm fairly sure that notice has to be at 100% (not an expert though, just going by my experience and what I have looked up). I think thay for holiday they can top up though. We had to take accumulated holiday during furlough and it basically meant that the government paid 80% and work topped up to 100% for the time we were on leave.

Check with Acas re the bank holidays as I think they can't top up now as they should have agreed to pay you 100% at the time or to use them later. they can't just decide to top up later. I've had the conversation with my work about the 4 bank hols and we are now being given then over the next 2 years rather than being topped up like they wanted originally.

”However the 4 bank holidays that have happened are only down to be paid at 20% to top of the 80% we would have been paid for them whilst furloughed. Is this right? I would have thought if they were treating them as holidays at the time we should have been paid the 100% by the company at the time, not topping it up now?”

For an employer to dictate when you take holiday they need to give you twice as much notice as the length of holiday they want you to take. Therefore if you would normally work the bank holiday, or would need to book it off, they can’t decide in retrospect that you were on annual leave that day. However if your contract says you take bank holidays off then they didn’t need to give you notice. They should have topped up at the time, yes, but they are rectifying it now.

”Also notice pay is only being paid at the 80% furlough rate? Again are they able to do this?” Again, it depends. If you are on statutory minimum notice only, then notice has to be paid at 100%. If you are on a contractual notice period that is at least a week more than statutory minimum then they can continue paying you at 80% during your notice period.

Thank you for all the advice.
Flowery I was hoping you might pop up... yes it’s the contractual part at the 80% so it’s correct.
Thought it was worth checking as it’s a small company not renowned for following Hr advise, but it seems In This case they have.
Thanks again for the help.

@flowery - is this right? The contractual notice pay is only to be paid at 80%?

I have spoken with an HR professional on this matter and their understanding is that the employers can use the furlough money to cover the 80% of the normal pay, but then they need to top up and pay the remainder of 20% of normal pay, similar to the holiday pay treatment. Furloughed employees should not be made redundant on less favourable terms than their contractual notice would stipulate.

”flowery - is this right? The contractual notice pay is only to be paid at 80%?”

If someone isn’t working because their employer isn’t providing them with work (eg furlough) then notice must be paid at 100% BUT if the contractual notice is at least a week more than the statutory minimum, the requirement to pay 100% doesn’t apply, and they can therefore be paid at 80%. It’s in the Employment Rights Act.

Interesting @flowery - thanks!
So if the contractual notice is longer than the statutory notice, then you only get paid at 80%?
How about if the furlough salary is already capped at the maximum amount, which in some industries is no where near the 80% mark.
Does that mean that the employer is right to pay only the current furlough money capped at the maximum amount and nothing else?
I would find it extraordinary if that is indeed the case, as it seems counterintuitive to ask people to go on furlough only to make them redundant later at much less than their contractual notice pay.

Many employers are paying 100% anyway.

Furlough wasn't invented when the Employment Rights Act was written, so the interaction between the two wasn't foreseen, and in any case furlough leave isn't a thing - from an employment law point of view it's really just a period of time at a reduced amount of pay.

It's not about furlough pay as such, it's about the entitlement to 100% not applying if the contractual notice is at least a week more than statutory minimum. So how much a furloughed employee happens to be getting is irrelevant, whether it's anywhere near the cap or not.

It most commonly comes into play when someone is resigning on maternity leave or sick leave, so are either only getting SMP or maybe even nothing at the time they resign or are dismissed.

Not sure why it's counterintuitive to ask people to go on furlough only to make them redundant later? How much notice pay the person would get is unlikely to be a factor, and often an employer wouldn't know whether they would pay at 100% or 80% in the event of a hypothetical redundancy at a later date.

You could look at it the other way. If someone is off work and receiving 80% pay (or statutory sick pay or statutory maternity pay etc) and their employment is ending, why would they suddenly start getting paid at a higher amount just because they are serving their notice?

You could argue that it's "extraordinary" to have to pay someone who has been on maternity leave for 11 months a few weeks on full pay just because they've resigned. It's the same provision.