Daughters employer laid everyone off with no furlough option

7Phil

I wasn't saying anything wrong about there being 30 staff. Just that the business sounds large and that's the reality of why this scheme may not work flawlessly -- having to cover all those wages for a month may not be possible and can't always blame the business operators for being forced in to that decision.

sliphi

MFF said:

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?

Yes
Possibly
Possibly

sliphi

MFF said:

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 :-(

Sounds like your daughter has had a lucky escape from an employer who does not understand how to run a business.

I wish her better success in whatever new job she secures in the future

LilElvis

sliphi said:

MFF said:

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 :-(

Sounds like your daughter has had a lucky escape from an employer who does not understand how to run a business.

I wish her better success in whatever new job she secures in the future

A tad unfair. They will have zero income but still have outgoings and probably have suppliers to pay for the period when they were still trading. They would have to pay the employees upfront for the furlough and then wait to reclaim it - how do propose they do this if they have insufficient money?

prowla

LilElvis said:

sliphi said:

MFF said:

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 :-(

Sounds like your daughter has had a lucky escape from an employer who does not understand how to run a business.

I wish her better success in whatever new job she secures in the future

A tad unfair. They will have zero income but still have outgoings and probably have suppliers to pay for the period when they were still trading. They would have to pay the employees upfront for the furlough and then wait to reclaim it - how do propose they do this if they have insufficient money?

But they also have a deferral of taxes due, which would likely cover the amount...

sliphi

LilElvis said:

sliphi said:

MFF said:

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 :-(

Sounds like your daughter has had a lucky escape from an employer who does not understand how to run a business.

I wish her better success in whatever new job she secures in the future

A tad unfair. They will have zero income but still have outgoings and probably have suppliers to pay for the period when they were still trading. They would have to pay the employees upfront for the furlough and then wait to reclaim it - how do propose they do this if they have insufficient money?

Not unfair at all, imho.

The employer clearly does not understand the financial packages open to them, nor how they can mitigate their expenses.

If they have zero income, that was their decision.  What suppliers do you imagine this alleged restuarant is still paying??? Food suppliers? Laundry services? Even their energy bills should be substantially less if they've closed up.

But thank you for your really useful contribution. I'm sure the OP is most grateful to the assistance you have provided them in this matter.

sharpe106

Exactly most people seem to the government are just going to hand all this cash over, no strings attached and more importantly on time. The reality will be very much different.

LilElvis

sliphi said:

LilElvis said:

sliphi said:

MFF said:

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 :-(

Sounds like your daughter has had a lucky escape from an employer who does not understand how to run a business.

I wish her better success in whatever new job she secures in the future

A tad unfair. They will have zero income but still have outgoings and probably have suppliers to pay for the period when they were still trading. They would have to pay the employees upfront for the furlough and then wait to reclaim it - how do propose they do this if they have insufficient money?

Not unfair at all, imho.

The employer clearly does not understand the financial packages open to them, nor how they can mitigate their expenses.

If they have zero income, that was their decision.  What suppliers do you imagine this alleged restuarant is still paying??? Food suppliers? Laundry services? Even their energy bills should be substantially less if they've closed up.

But thank you for your really useful contribution. I'm sure the OP is most grateful to the assistance you have provided them in this matter.

As all restaurants (bar a few takeaways) were forced to close several weeks ago it was hardly their decision to have zero income.

Um - all of the above bills have likely been payable over the last few weeks as businesses generally pay suppliers in arrears. They will still have had these bills to pay after closure  - probably at least a month's worth of them.

It's clearly escaped your notice that many restaurants, including high street names, were struggling long before the virus - Carluccios folded only a couple of weeks ago and other chains are also teetering on the brink e.g. Pizza Express, Chiquitos and Frankie &  Bennies. It's highly unlikely that independent restaurants will have been faring any better and likely have insufficient cash on hand to add a hefty wage bill to their commitments with no indication of when they will be reimbursed or when they can open their doors again.

I think it actually is useful to point out to employees that the decision not to furlough likely has little to do with the the employer not caring about their staff and more to do with cashflow, or lack thereof.