COVID-19 Employer Reducing Hours

Porsche928

Hi - I am looking for some advice. In response to the COVID-19 situation my husband's employer has put most people in the company on reduced hours.

Today a variation to his contract has been received in the post stating as from 1st April his contractual pay will be reduced by 50% and he will be expected to work 60% of his normal contracted hours. (Normal contracted hours being 40 hours per week, reducing to 24).

 The reasoning behind this reduction is to ensure the survival of the business during these unprecedented circumstances and to keep the business going thus ensuring roles are maintained for when the crisis is over.

The 50% decrease in salary falls way below the Government Job Retention Scheme which I understand will be available to those people who have unfortunately been laid off work completely or who can no longer work due to self-isolating or caring for children. 

The company feels it is doing the best for it's employees by adopting this model, however, it just doesn't feel right. Employees would be financially better off if the company laid them off and applied for the 80% grant. As a family we could cover all outgoings and survive on 80% but would struggle on only 50%.

Is the company allowed to do this? Is there likely to be any government top up to compensate in situations like this or is there any further help available to compensate the salary shortfall.

I would be grateful for any advice. Thanks in advance.

General_Grant

Porsche928 said:

Hi - I am looking for some advice. In response to the COVID-19 situation my husband's employer has put most people in the company on reduced hours.

Today a variation to his contract has been received in the post stating as from 1st April his contractual pay will be reduced by 50% and he will be expected to work 60% of his normal contracted hours. (Normal contracted hours being 40 hours per week, reducing to 24).

 The reasoning behind this reduction is to ensure the survival of the business during these unprecedented circumstances and to keep the business going thus ensuring roles are maintained for when the crisis is over.

The 50% decrease in salary falls way below the Government Job Retention Scheme which I understand will be available to those people who have unfortunately been laid off work completely or who can no longer work due to self-isolating or caring for children. 

The company feels it is doing the best for it's employees by adopting this model, however, it just doesn't feel right. Employees would be financially better off if the company laid them off and applied for the 80% grant. As a family we could cover all outgoings and survive on 80% but would struggle on only 50%.

Is the company allowed to do this? Is there likely to be any government top up to compensate in situations like this or is there any further help available to compensate the salary shortfall.

I would be grateful for any advice. Thanks in advance.

If the employer arranges to pay you 80% it costs them just the cost of administering it but they get no work done and they want to keep going.

You could refuse to accept the new pay (assuming it would still be at least NMW for the hours worked) and they could then decide to dismiss you.

selina2000

Porsche928 said:

Hi - I am looking for some advice. In response to the COVID-19 situation my husband's employer has put most people in the company on reduced hours.

Today a variation to his contract has been received in the post stating as from 1st April his contractual pay will be reduced by 50% and he will be expected to work 60% of his normal contracted hours. (Normal contracted hours being 40 hours per week, reducing to 24).

 The reasoning behind this reduction is to ensure the survival of the business during these unprecedented circumstances and to keep the business going thus ensuring roles are maintained for when the crisis is over.

The 50% decrease in salary falls way below the Government Job Retention Scheme which I understand will be available to those people who have unfortunately been laid off work completely or who can no longer work due to self-isolating or caring for children. 

The company feels it is doing the best for it's employees by adopting this model, however, it just doesn't feel right. Employees would be financially better off if the company laid them off and applied for the 80% grant. As a family we could cover all outgoings and survive on 80% but would struggle on only 50%.

Is the company allowed to do this? Is there likely to be any government top up to compensate in situations like this or is there any further help available to compensate the salary shortfall.

I would be grateful for any advice. Thanks in advance.

You will need to refer to your contract of employment to see if this is permitted.

Your employer will not be entitled to 80% of full pay, or any other percentage of pay, as to be eligible for the Coronavirus Job Retention Scheme, you need to be furloughed. i.e. sent home and not do any work at all for that employer.

If your salary is reduced as a result of the current situation, you may be eligible for support through the welfare system, including Universal Credit.

Porsche928

Thanks for the replies - May have to look into Universal Credit but not sure we would be eligible

calcotti

See Universal Credit. https://www.citizensadvice.org.uk/benefits/universal-credit/  
There are online calculators to help you assess entitlement  https://www.gov.uk/benefits-calculators