It is bizarre to think that almost six months have now passed since our offices closed for Covid-19 on 20th March 2020. At the outset of the Pandemic, a number of protective measures were introduced by the Government. Perhaps the most significant of these introductions was the Coronavirus Job Retention Scheme, more commonly known as the furlough scheme. The purpose of the scheme was to allow employers to retain employees during the pandemic and to avoid large scale redundancies. This article looks at the changes being introduced to the scheme in September, as well as what to do if unfortunately you find yourself facing redundancy,
As of 1st July 2020, employers have been able to furlough employees on a part time basis only. This option remains open to employers in September. Until now, the scheme has operated on the basis that the government will pay 80% of an employee’s wages during any periods they are on Furlough leave. The employer has had a discretion to ‘top up’ a furloughed employee’s wages to 100% should they deem it appropriate.
As of 1st September 2020, the thresholds are changing. The changes mean that the government will now only pay 70% of an employee’s wage, up to a cap of £2187.50. Employers will be required to pay the employee’s national insurance contribution in addition to 10% of the employee’s wage. Again, the employer has a discretion as to whether they ‘top up’ the wage to 100%.
Further changes will be introduced on 1st October 2020, whereby the government will pay 60% of wages up to a cap of £1875. Employers will pay the national insurance contribution plus 20% of the employee’s wages.
The scheme will come to an end on 31st October 2020.
Unfortunately, despite the huge benefit the Furlough Scheme has brought to employers, many employees have found themselves facing redundancy as a result of the pandemic. In many cases, this is either for financial reasons, or because employers have looked at ways of improving efficiency over the last 6 months, with the consequence that certain positions in the business are no longer required.
When an employee is made redundant, it is important that they take legal advice in relation to the contents of any settlement agreement they have been offered, so as to ensure they understand the consequences of their redundancy. We have experience in advising both employers and employees on the content of their settlement agreements.
If you have been offered a settlement agreement and would like advice in relation to its contents, we would be more than happy to assist you. Alternatively, if you are unhappy with any proposal which has been made, our expert employment team can assist you with negotiating the terms of your settlement agreement.
If you are either an employer or an employee who is seeking advice, either in relation to the Furlough Scheme, or on a proposed settlement agreement, we would like to hear from you. Call us on 0330 0945 500, email email@example.com or complete our Online Contact Form and we'll get back to you.