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Furlough, redundancies and the return to work: What’s the latest?
As we all navigate our return to work with the winding up of the Coronavirus Job Retention Scheme on the horizon there are several key considerations for employers. Here, Nick Wilson, partner in our employment law team, gives his insights on the current situation.
With all the headline talk in July of flexible furlough, it may be easy to forget that 1 August 2020 signals the most significant step to date in the Coronavirus Job Retention Scheme being wound down. As from that date, employers will be required to pay National Insurance and pension contributions for the hours that the employee is on furlough – those sums will no longer be covered by the furlough grant meaning that employers will need to fund those payments themselves. Will this prompt organisations to face the financial reality of their operation and consider making redundancies? As we know, the amount of the furlough grant reduces incrementally from 1 September and the scheme ends altogether on 31 October 2020.
Speaking of redundancies… in force as of 31 July 2020, is the legal requirement for employers to pay statutory redundancy pay at the rate of the furloughed employee’s normal pay and not at the rate of any furlough pay. It raises an interesting point and I wonder how many furloughed employees who have been made redundant have received redundancy pay at less than their ‘normal’ rate. The regulations giving rise to this also set out a number of other situations where the calculation of a week’s pay should take into account the normal rate of pay and not the rate of any furlough pay. For example, statutory notice pay is stated as being paid at the normal rate but I think we had all worked that out some time ago.
We are also seeing lots of discussion around the employment law implications for employers who have staff returning from holidays abroad only to face a mandatory quarantine period which prevents them from attending work. I’ll be posting more in-depth on that shortly but in the meantime, the employment team at Andrew Jackson is ready to help you deal with any employment law issues.