Furloughed and then made redundant - can that happen?

nikkita_monteiro

Due to the Covid-19 my whole company was furloughed on the 26th of March. We all received official emails from the CEO of the company. Then on 30th March I received a call from the CEO telling me she was letting me go and making me redundant? As you can imagine I have had a really emotional week but today it struck me..Is it illegal to furlough and then make redundant? 

My fear is that this was done as the company was worried about short term cash flow problems and it is not clear when the government will start making reimbursements. Does anyone know what my rights are? Should I still be legally furloughed? I am only being paid two weeks leave and no redundancy pay. Longest standing employee of the company until this. Absolutely shocked. Please share any advice you have.

Thank you in advance!

calcotti

You have no right to be furloughed. It is the employer's decision. Any redundancy must comply with normal redundancy law and if you have been employed a long time you should be entitled to redundancy pay. 
https://www.gov.uk/redundancy-your-rights
https://www.acas.org.uk/redundancy

nikkita_monteiro

I understand that - but can they formally tell you in writing that your furlough has started and come back to you four days later and make you redundant?

missibleu

How long have you worked there and what is your age. Also I think they have to put all employees under possibility of redundancy notice from previous experience but I’m no expert.

Hermann

calcotti said:

You have no right to be furloughed. It is the employer's decision. Any redundancy must comply with normal redundancy law and if you have been employed a long time you should be entitled to redundancy pay. 
https://www.gov.uk/redundancy-your-rights
https://www.acas.org.uk/redundancy

Perhaps they do have some rights to furlough if a written agreement is in already in place putting the employee on furlough. I don't think there is anything from the job retention scheme that applies.

I expect this comes to down to whatever is in the contract including the furlough agreement.

calcotti

Hermann said: Perhaps they do have some rights to furlough if a written agreement is in already in place putting the employee on furlough. I don't think there is anything from the job retention scheme that applies.

I expect this comes to down to whatever is in the contract including the furlough agreement.

Fair point!

nikkita_monteiro

missibleu said:

How long have you worked there and what is your age. Also I think they have to put all employees under possibility of redundancy notice from previous experience but I’m no expert.

I have worked there since December 2018 and I am 23.

Does anyone actually know when the government will be able to start reimbursing businesses for the retention scheme? I think short term cash flow is the concern.

Jeremy535897

Probably end April at the earliest before any payments are made. Businesses can seek a business interruption loan to help in the short term.
Regarding redundancy while furloughed, the guidance to employees says:

"Your employer can still make you redundant while you’re on furlough or afterwards.

Your rights as an employee are not affected by being on furlough, including redundancy rights."

Unfortunately as you have worked there for less than two years you have no right to statutory redundancy, and the 2 weeks notice is more than the statutory notice period for employees with less than two years' service. You should check your contract of employment to see if it is more generous, but I suspect that 2 weeks notice is all it will entitle you to.

prowla

You can't be on furlough and be being made redundant, so the company is not helping anybody by pulling the trigger now; it gains nothing.

The purpose of furlough was to avoid redundancy, or at least stave it off for 3 months.

I don't know if the company thinks it can cover the redundancy period as furlough, but the scheme (https://www.gov.uk/guidance/claim-for-wage-costs-through-the-coronavirus-job-retention-scheme) explicitly doesn't allow this.

Grants cannot be used to substitute redundancy payments. HMRC will continue to monitor businesses after the scheme has closed.

Jeremy535897

prowla said:

You can't be on furlough and be being made redundant, so the company is not helping anybody by pulling the trigger now; it gains nothing.

The purpose of furlough was to avoid redundancy, or at least stave it off for 3 months.

I don't know if the company thinks it can cover the redundancy period as furlough, but the scheme (https://www.gov.uk/guidance/claim-for-wage-costs-through-the-coronavirus-job-retention-scheme) explicitly doesn't allow this.

Grants cannot be used to substitute redundancy payments. HMRC will continue to monitor businesses after the scheme has closed.

As per my post above, the guidance expressly states that you can be made redundant while furloughed. Circumstances change, and an employer who hoped to keep someone on when deciding to furlough them might come to realise that it just won't work. That's a different issue from the one above, which is effectively saying that an employer cannot treat a furlough period as part of a statutory redundancy period. If you are made redundant during furlough, the furlough will cease at that date.