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Seven things to check if you’re at risk of redundancy as furlough job cuts loom

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FURLOUGH has provided millions of people with much needed support during the coronavirus pandemic.

But with the scheme soon coming to an end, many workers are now facing redundancy instead.

Job losses are expected to rise with the end of furlough on 31 October

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Job losses are expected to rise with the end of furlough on 31 OctoberCredit: Getty Images – Getty

Around half a million people could lose their jobs this autumn, a shocking new study has predicted.

And many businesses are expected to tell staff they are at risk of redundancy this week, timing the required consultation period with the end of furlough on 31 October.

Companies must consult staff before making redundancies and for job losses of more than 100 people the law requires the consultation must last 45 days.

London City Airport is the latest to announce job cuts in the travel industry, following Gatwick and Heathrow airports, airlines British Airways, Ryanair and Virgin Atlantic, among others.

What is furlough?

THE aim of the government’s job retention scheme is to save one million workers from becoming unemployed due to the coronavirus crisis.

Under the scheme, furloughed workers receive 80% of their wages, up to £2,500 a month, if they can’t work because of the impact of coronavirus.

One of the main benefits of the scheme is that it allows workers to be kept on the payroll rather than being laid off.

Furlough is available to all employees that started a PAYE payroll scheme on or before March 19, 2020, although it closed to new entrants in June.

The scheme has been extended to run until October 31, 2020, and can be backdated to March 1, 2020.

Previous rules meant that staff couldn’t undertake any work for their employers while on furlough.

But from July 1, staff members were allowed to go back part-time and they must be paid in full for the hours that they work.

From September 1, employers will have to start contributing 10% of wages, with the government paying the remaining 70%.

And from October 1, employers need to foot 20% of the bill, with the government making up the remaining 60%.

The government also paid the associated employer national insurance contributions and minimum automatic enrolment employer pension contributions on top, although employers started paying these costs from August 1.

Jobs in retail and hospitality have also been hard hit, with jobs at Pizza Hut, Pret a Manger and Marks and Spencer set to go.

Tracey Moss, senior employment expert at Citizens Advice said: “If you’re at risk of redundancy, it’s important to know you do have rights to help protect you from unfair dismissal and to ensure you’re paid what you’re owed.”

Here, we talk you though what you need to know if you’re facing redundancy and the important things to check so you get what you’re entitled to.

1. Is your redundancy fair?

Many people feel redundancy is not fair, but there are specific rules when it comes to what is and is not considered fair in the legal sense.

A redundancy could be unfair if you’ve been discriminated against or if the reason is unfair.

Being picked because you work part-time or because you made a complaint about health and safety are examples of unfair reasons for redundancy.

Although you can be made redundant while pregnant or on maternity leave, you cannot be made redundant because you’re pregnant or on maternity leave.

If you are this counts as “automatic unfair dismissal” and discrimination, say Citizens Advice.

The organisation has a handy guide to help you understand if your redundancy is fair.

What are my redundancy rights?

BEFORE making you unemployed, your employer should still carry out a fair redundancy process.

You are entitled to be consulted on the redundancy lay-off first and to receive a statutory redundancy payment, as long as you’ve been working somewhere for at least two years.

How much you’re entitled to depends on your age and length of service, although this is capped at 20 years. You’ll get:

  • 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.

Sadly, you won’t be entitled to a payout if you’ve been working for your employer for fewer than two years.

There should be a period of collective consultation as well as time for individual ones if your employer wants to make 20 or more employees redundant within 90 days or each other.

You are also entitled to appeal the decision by claiming unfair dismissal within three months of being let go.

2. How much is your redundancy pay?

You are entitled to statutory redundancy pay if you’ve been employed for two years or more.

You won’t get this if you’ve been there for less than two years, or if you’re self-employed, and you can lose out on this money if you’re offered a suitable alternative job, but you turn it down without a good reason.

Statutory redundancy pay is the minimum you’ll get, but you may get more than this – known as contractual redundancy pay – if that’s something your employer offers and it’s in your contract.

There are some circumstances where you might be entitled to one and not the other.

For example, if you only work somewhere for a year you won’t get statutory redundancy pay but your employer may offer contractual redundancy pay.

With statutory redundancy, you’ll get:

  • 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 a half week’s pay for each full year you were 41 or older

Length of service is capped at 20 years, and weekly redundancy pay is capped at £525 with a maximum statutory payout of £15,750.

3. Is your redundancy pay 100%?

It can be a little confusing if you’re being made redundant while on furlough.

Even if your pay on furlough is 80% of your normal wage, it’s still your full wage which should be used to work out redundancy payments, not the lower furlough amount.

Sir Philip Green, the top boss of Arcadia Group which owns high street store Topshop among others, was forced to apologise after wrongly paying staff working their notice period at the furlough rate instead of their full wage.

Can I be made redundant if I’m on furlough?

EVEN though furlough is designed to keep workers employed, unfortunately it doesn’t protect you from being made redundant.

But it doesn’t affect your redundancy pay rights if you are let go from your job amid the coronavirus crisis.

Your employer should still carry out a fair redundancy process.

You will be entitled to be consulted on the redundancy lay-off first and to receive a statutory redundancy payment, as long as you’ve been working somewhere for at least two years.

How much you’re entitled to depends on your age and length of service, although this is capped at 20 years. You’ll get:

  • 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.

Sadly, you won’t be entitled to a payout if you’ve been working for your employer for fewer than two years.

There should be a period of collective consultation as well as time for individual ones if your employer wants to make 20 or more employees redundant within 90 days or each other.

You are also entitled to appeal the decision by claiming unfair dismissal within three months of being let go.

If you’re made redundant after your company has gone into administration you can claim redundancy pay via Gov.uk.

4. What is your notice period?

You are entitled to a statutory notice period if you’ve worked for your employer for at least one month.

If you’ve worked for at least one month but less than two years, your notice period is one week.

If you’ve worked for them for more than two years, your notice period is one week for each full year you’ve worked, up to a maximum of 12 weeks.

For example, if you worked somewhere for five years and seven months, your statutory notice would be five weeks.

If you worked somewhere for 15 years, you statutory notice would be 12 weeks.

Your notice can be more than this if you have an agreement with your employer in your contact.

Your notice period only starts when your employer has confirmed your redundancy and given you an end date to employment – it is not from when you are told your job is at risk of redundancy.

Instead of working your notice period, you may be given notice pay instead and this is known as “pay in lieu of notice”.

5. What holiday pay do you get?

You should check if you have any outstanding holiday.

This will still be paid to you and will be at your full rate of pay even if you’re furloughed on 80% of your pay.

Or, you can take the holiday in your notice period if your employer agrees (they don’t have to) and as long as your notice period is twice as long as the holiday your taking.

6. Can you get paid time off to look for work?

If you’ve worked for your employer for more than two years you can take “reasonable” time off to apply for jobs or for training.

Citizens Advice says: “You can take the time off at any time in normal working hours and your employer can’t ask you to rearrange your work hours to make up the time off.

“When taking time off to look for work, you’ll be paid at your normal hourly rate, but only for up to 40% of a week’s work – for instance for up to two days if you work a five-day week.”

The organisation has more on how this works and how you can prepare for redundancy.

7. Can you get legal help through your insurance?

With some home insurance you get something known as legal expenses cover.

Check the terms and conditions of your policy or with your insurer directly if you can use this cover to pay for legal help to challenge a redundancy that you think is unfair or discriminatory.

If you’re a member of a trade union, they may also provide support with a legal claim.

For free redundancy support, contact Citizens Advice.

Ms Moss said: ““It’s completely understandable that you may find the rules and procedures overwhelming, but you don’t have to face redundancy alone.

“If you’re struggling, contact your nearest Citizens Advice for help.” 

Workers are being urged to get back to offices – but employers have to make sure it’s safe for them to return first. Here are the rules they must follow and what your rights are.

Martin Lewis has urged furloughed workers to check if they’re still being paid 80% of their salary after a change in how the scheme works.

If Covid-19 has put your job at risk here are ten tips to help boost your chances of securing work.

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