Daughters employer laid everyone off with no furlough option

MFF

My daughter has worked in a restaurant for three years, zero hour contract but has done 35+ hours a week every week since she started. When they had to close due to the lockdown they decided to lay all the staff off despite the option to put them on the 80% furlough scheme, citing the reason they would still be liable for tax and pension payments they could not afford to meet. Is it legal for her employer to do this? And if so, can she claim any other benefit? Universal credit?

mattyprice4004

Google ‘benefit calculator’ and you’ll find a great site that calculated exactly what she’s entitled to. 

No one is entitled to furlough - it’s entirely optional on the part of the employer; if they don’t want to, they don’t have to. 

It’s worth checking out if she’s entitled to redundancy pay etc, though 

7Phil

Yes it is legal but personally I think it is morally questionable to so this at such a time. Employers could be in a position to offer employees a lifeline and considering their employees have been the lifeblood of their business (and probably the face of their reputation if they are a restaurant) then surely they can chip in and help. This scheme is a benefit for our community, economy and everyone. Turning backs on employees as this time is turning backs on the UK's economy at the same time.

Employers will get reimbursed for NIC and auto-enrolment pension. Other benefits may not be covered. The rules and guidance is clear however it is evolving and being updated before our very eyes. The business may just not be up-to-date so there is a chance they could reconsider.

I would encourage her to push back and fight (constructively) for anything she can get. If she is close with the other members of the team then remember there is strength in numbers.
To re-hire and put people on furlough will cause a business some admin overhead and they will also need to front up initial cash (unless, the employees agreed to be paid late I suppose?) but as I mentioned above I think this is a small price to pay, even a duty almost, to their workers. Three years is a lot of service!

Universal credit has been given a boost recently and there is a new policy of "don't call us, we will call you". Not sure how helpful that is? There is an official eligibility checker and other forumites have posted links extensively on this forum recently.
Good luck to her.

MFF

7Phil said:

Yes it is legal but personally I think it is morally questionable to so this at such a time. Employers could be in a position to offer employees a lifeline and considering their employees have been the lifeblood of their business (and probably the face of their reputation if they are a restaurant) then surely they can chip in and help. This scheme is a benefit for our community, economy and everyone. Turning backs on employees as this time is turning backs on the UK's economy at the same time.

Employers will get reimbursed for NIC and auto-enrolment pension. Other benefits may not be covered. The rules and guidance is clear however it is evolving and being updated before our very eyes. The business may just not be up-to-date so there is a chance they could reconsider.

I would encourage her to push back and fight (constructively) for anything she can get. If she is close with the other members of the team then remember there is strength in numbers.
To re-hire and put people on furlough will cause a business some admin overhead and they will also need to front up initial cash (unless, the employees agreed to be paid late I suppose?) but as I mentioned above I think this is a small price to pay, even a duty almost, to their workers. Three years is a lot of service!

Universal credit has been given a boost recently and there is a new policy of "don't call us, we will call you". Not sure how helpful that is? There is an official eligibility checker and other forumites have posted links extensively on this forum recently.
Good luck to her.

Thank you. According to her employers it was going to cost them £6000 a month to furlough the 30 staff that work(ed) there, despite the governments contribution. I guess three years service means nothing if its going to cost the owners a few quid they could get away without paying :-(

sharpe106

MFF said:

Thank you. According to her employers it was going to cost them £6000 a month to furlough the 30 staff that work(ed) there, despite the governments contribution. I guess three years service means nothing if its going to cost the owners a few quid they could get away without paying :-(

Maybe they could not have afforded that themselves, as they have to pay out and then reclaim the money.

7Phil

MFF said:

Thank you. According to her employers it was going to cost them £6000 a month to furlough the 30 staff that work(ed) there, despite the governments contribution. I guess three years service means nothing if its going to cost the owners a few quid they could get away without paying :-(

I guess that's part of the problem and the reality that sometimes things that work in theory are totally different when put in practice. I kind of hope businesses could explore other options such as the Business Interruption Loans but even then I admit there could be delays and processing costs for someone to admin it, plus business risk.
Not sure what the restaurant is but 30 staff sounds large and/or with multiple branches. They may have their own genuine reasons why this scheme is not feasible, in which case fair enough. The brutal truth though is these decisions are probably being made by bookkeepers. If it doesn't make business sense to help staff then it won't happen. In that case I wish those bookkeeper people nothing but the worst. They are not playing ball.

Life will soon resume and she will probably get called up to come back to work. Wouldn't that be a sweet discussion! She's already well trained, experienced and can hit the ground running. Assuming she has other choices or opportunities then she has the power to ask for more money to come back. She won't owe them any favours.

calcotti

MFF said: And if so, can she claim any other benefit? Universal credit?

Yes, Universal Credit (assuming she is 18 or over).
Information here https://www.citizensadvice.org.uk/benefits/universal-credit/. 
Claim online https://www.gov.uk/universal-credit/how-to-claim

There are online calculators to help her assess entitlement  https://www.gov.uk/benefits-calculators

She will be excluded from claiming UC if you have capital/savings over £16,000.

Be aware that claiming UC will end any Tax Credits, Housing Benefit or other means tested benefits she currently gets.

aleeam

Yes, beside the IT sector, the restaurant's business is highly affected and even after the Corona situation settles down, even after that this sector won't open straight-away. 

prowla

If the business hasn't the funds to pay the 80% scheme until they can reclaim it, then they've been faced with a lose-lose situation and have had to make a difficult choice.

Which is sad for both the restaurant and the workers.

They may have been struggling already and this is the (rather large!) straw which broke the camel's back.

p00hsticks

7Phil said:

Not sure what the restaurant is but 30 staff sounds large and/or with multiple branches.

30 staff isn't necessary that much when you consider that the restaurant could be open 12 hours a day seven days a week and so need multiple shifts of both front of house and back of house staff

Andy_L

7Phil said:

MFF said:

Thank you. According to her employers it was going to cost them £6000 a month to furlough the 30 staff that work(ed) there, despite the governments contribution. I guess three years service means nothing if its going to cost the owners a few quid they could get away without paying :-(

I guess that's part of the problem and the reality that sometimes things that work in theory are totally different when put in practice. I kind of hope businesses could explore other options such as the Business Interruption Loans but even then I admit there could be delays and processing costs for someone to admin it, plus business risk.
Not sure what the restaurant is but 30 staff sounds large and/or with multiple branches. They may have their own genuine reasons why this scheme is not feasible, in which case fair enough.

30 staff but a monthly pay bill of 6k. A couple of full timers and a lot of waiting staff on zero hours to provide cover